Suppose the government sets a price floor that is above the equilibrium price for a given good.It can be said that at the price floor,
A) although sellers are selling all of the product that they desire at this price,the consumers are not able to buy all that they desire.
B) although consumers are purchasing all of the product that they desire at this price,the sellers are not selling all that they desire.
C) both sellers and buyers are satisfied with the quantity that is being exchanged.
D) both sellers and buyers are exchanging the equilibrium quantity of this good.
E) b and d

Question

Quizplus · Accepted Answer

At the price floor, the price is above the equilibrium price, which means that there is a surplus of the product. Since the price is too high, consumers are not willing to buy all that they desire, resulting in excess inventory or unsold goods. On the other hand, sellers are not able to sell all that they desire since buyers are not willing to purchase the product at the given price. Therefore, B is the correct answer.

Suppose the Government Sets a Price Floor That Is Above