FIGURE 5- 1
-Refer to Figure 5- 1. If the government imposes an administered price at P2, the result will be a
A) shortage of AC
B) shortage of FD
C) surplus of BD
D) surplus of AF
E) surplus of 0D

Question

FIGURE 5- 1
-Refer to Figure 5- 1. If the government imposes an administered price at P2, the result will be a
A) shortage of AC 
B) shortage of FD 
C) surplus of BD 
D) surplus of AF 
E) surplus of 0D

Quizplus · Accepted Answer

If the government sets a price floor at P2 above the equilibrium price, it will result in a surplus, as the quantity supplied (BD) will exceed the quantity demanded.

FIGURE 5- 1 -Refer to Figure 5- 1. If the Government Imposes an Government