(Figure: The Market for Tortillas) Use Figure: The Market for Tortillas. With a nonbinding price floor, the price could be equal to _____, consumers would demand _____, and producers would supply _____.

Question

Quizplus · Accepted Answer

With a nonbinding price floor, the price cannot be higher than the equilibrium price of $0.12. Therefore, the price would be equal to $0.12. Consumers would demand 12 million tortillas (Q₂), which is the same as at the equilibrium price. Producers would supply 12 million tortillas (Q₂), which is also the same as at the equilibrium price. The nonbinding price floor does not affect the quantity demanded or supplied, only the price.

(Figure: the Market for Tortillas) Use Figure: the Market for Tortillas