The most likely impact of an effective price floor is:
A) the supply curve will shift to the right.
B) the demand curve will shift to the left.
C) a surplus will develop.
D) a shortage will develop.

Question

Quizplus · Accepted Answer

A price floor set above the equilibrium price leads to a surplus because it results in a higher price than consumers are willing to pay, reducing quantity demanded while increasing quantity supplied.

The Most Likely Impact of an Effective Price Floor Is