Use the following to answer question:
-(Table: Quantity Supplied and Quantity Demanded) Look at the table Quantity Supplied and Quantity Demanded. The government institutes a price floor, and as a result too many resources are allocated for the production of a good. The price floor in this market must be equal to:
A) $5.
B) $10.
C) $15.
D) $20.

Question

Use the following to answer question: 
-(Table: Quantity Supplied and Quantity Demanded) Look at the table Quantity Supplied and Quantity Demanded. The government institutes a price floor, and as a result too many resources are allocated for the production of a good. The price floor in this market must be equal to:
A) $5. 
B) $10. 
C) $15. 
D) $20.

Quizplus · Accepted Answer

A price floor set above the equilibrium price causes a surplus, leading to over-allocation of resources. The price floor must be above the equilibrium price to have an effect, which is likely at $20.

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