The market for apples is in equilibrium at a price of $0.50 per pound.If the government imposes a price floor in the market at a price of $0.40 per pound:
A)quantity demanded will decrease.
B)quantity supplied will increase.
C)there will be a shortage of apples.
D)the price floor will not affect the market price or output.

Question

Quizplus · Accepted Answer

Since the price floor is set below the equilibrium price of $0.50 per pound, it will not be binding and will have no effect on the market price or quantity. The market will continue to operate at the equilibrium price.

The Market for Apples Is in Equilibrium at a Price