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.
-To have an effect on the market, a price floor should be set at a price
A)above the equilibrium price.
B)equal to the equilibrium price.
C)below the equilibrium price.
D)at any price on the supply curve.

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.
-To have an effect on the market, a price floor should be set at a price
A)above the equilibrium price. 
B)equal to the equilibrium price. 
C)below the equilibrium price. 
D)at any price on the supply curve.

Quizplus · Accepted Answer

Setting a price floor at a price above the equilibrium price would create a situation where the quantity supplied would exceed the quantity demanded, resulting in a surplus. This surplus would put downward pressure on the price until it reached the equilibrium price. Therefore, setting a price floor above the equilibrium price would be effective in increasing the price of weezils in the market.

The Following Are the Equations for the Supply and Demand