Suppose the equilibrium price of carrots is $1. The price floor instituted by the government is $1.50. Based on this information, which scenario would you expect to take place in the market?
A) There would be a surplus of carrots.
B) There would be a shortage of carrots.
C) Farmers would switch from growing carrots to growing potatoes.
D) The price floor would have no impact on the market because it is higher than the equilibrium price.
Correct Answer:
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