-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at P_F.How many fewer units of wheat will be sold at the price floor than at the equilibrium price?

Question

-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at P<sub>F</sub>.How many fewer units of wheat will be sold at the price floor than at the equilibrium price? A) Q<sub>2</sub> - Q<sub>1</sub> B) Q<sub>3</sub> - Q<sub>2</sub> C) Q<sub>3</sub> - Q<sub>1</sub> D) Q<sub>2</sub>

Quizplus · Accepted Answer

A price floor set above the equilibrium price results in a surplus, where quantity supplied (Q2) exceeds quantity demanded (Q1). The difference, Q2 - Q1, represents the fewer units sold.