An effective price floor is set _____ the equilibrium price and causes a _____.

Name: An effective price floor is set _____ the equilibrium price and causes a _____.
Brand: Quizplus
Rating: 4.8 (54 reviews)

Question

Quizplus · Accepted Answer

A price floor set above the equilibrium price causes a surplus because it sets the minimum price at a level higher than what the market would naturally settle at, leading to excess supply as producers are willing to supply more at the higher price, but consumers are not willing to buy as much.

An Effective Price Floor Is Set _____ the Equilibrium Price