Which of the following is an example of the effect of a price floor?
A)Scalping of Super Bowl tickets
B)Surplus cheese
C)The New York city housing shortage
D)Black markets
E)Milk shortages

Question

Quizplus · Accepted Answer

A price floor is a minimum price set by the government above the equilibrium price. This creates a surplus, where suppliers are willing to supply more than consumers are willing to buy at the higher price, resulting in excess supply or surplus. Surplus cheese is an example of this, where the government sets a price floor for cheese, resulting in excess supply that must be stored or disposed of.

Which of the Following Is an Example of the Effect