Exhibit 4.7

-Suppose a price floor for a good is set above the equilibrium price. At this price, it is likely that _____

Question

Exhibit 4.7
 
-Suppose a price floor for a good is set above the equilibrium price. At this price, it is likely that _____

Quizplus · Accepted Answer

When a price floor is set above the equilibrium price, it typically results in a surplus where the quantity supplied exceeds the quantity demanded because producers are willing to supply more of the good at the higher price, but consumers are less willing to buy the good at that price.

Exhibit 4.7 -Suppose a Price Floor for a Good Is Set Above