The following are the equations for the supply and demand curves in the market for weezils: where Qd is the quantity demanded, Qs is the quantity supplied, and P is the price per weezil in dollars.
-The United States typically experiences a large surplus of milk annually.This is caused by
A)a price ceiling in the market.
B)not enough demand for milk.
C)a price floor in the market.
D)overproduction of milk by the cows.

Question

The following are the equations for the supply and demand curves in the market for weezils:   where Qd is the quantity demanded, Qs is the quantity supplied, and P is the price per weezil in dollars.
-The United States typically experiences a large surplus of milk annually.This is caused by
A)a price ceiling in the market. 
B)not enough demand for milk. 
C)a price floor in the market. 
D)overproduction of milk by the cows.

Quizplus · Accepted Answer

A price floor in the market, especially when set above the equilibrium price, can lead to a surplus by encouraging higher production than the market demands. In the case of milk, government policies often set a minimum price that processors pay for milk, which can result in excess supply.

The Following Are the Equations for the Supply and Demand