-Refer to Exhibit 4-11.Suppose that the government imposes a price floor in the market for good ABC at a price of $7.The result of the price floor would be a ____________ of ______ units of good ABC.
A) shortage; 110
B) surplus; 110
C) shortage; 30
D) surplus; 30

Question

-Refer to Exhibit 4-11.Suppose that the government imposes a price floor in the market for good ABC at a price of $7.The result of the price floor would be a ____________ of ______ units of good ABC.
A) shortage; 110 
B) surplus; 110 
C) shortage; 30 
D) surplus; 30

Quizplus · Accepted Answer

A price floor set above the equilibrium price causes a surplus because the quantity supplied (160 units) exceeds the quantity demanded (50 units) at the price floor, resulting in a surplus of 110 units.