A binding price floor
(i)causes a surplus.
(ii)causes a shortage.
(iii)is set at a price above the equilibrium price.
(iv)is set at a price below the equilibrium price.

Name: A binding price floor (i)causes a surplus. (ii)causes a shortage. (iii)is set at a price above the equilibrium price. (iv)is set at a price below the equilibrium price.
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Question

Quizplus · Accepted Answer

A binding price floor is set above the equilibrium price, causing a surplus because the quantity supplied exceeds the quantity demanded at that price.

A Binding Price Floor