If a binding price floor were placed in the market shown in the graph:

Name: If a binding price floor were placed in the market shown in the graph:
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Question

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If a binding price floor were placed, it would be set above the equilibrium price. As a result, the quantity supplied would exceed quantity demanded as suppliers would be incentivized to produce more at the higher price, while consumers would reduce their demand due to the higher price. This would result in a surplus of goods in the market.

If a Binding Price Floor Were Placed in the Market