Table 6-2

-Refer to Table 6-2.A price floor set at $20 will

Name: Table 6-2 -Refer to Table 6-2.A price floor set at $20 will
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Question

Table 6-2
 
-Refer to Table 6-2.A price floor set at $20 will

Quizplus · Accepted Answer

A price floor is binding if it is set above the equilibrium price, which is $10 in this case. Setting a price floor of $20 will result in a surplus of 250 units because at a price of $20, suppliers will want to produce and sell 400 units, but only 150 units will be demanded by consumers. Therefore, there will be a surplus of 250 units (400-150).

Table 6-2 -Refer to Table 6-2.A Price Floor Set at $20 Will