If the government sets a floor on the price of wheat that is above the market equilibrium price, the result will be
A) a surplus of wheat
B) a shortage of wheat
C) small profits for wheat farmers
D) a decrease in the quantity supplied of wheat

Question

Quizplus · Accepted Answer

When the government sets a floor price above the market equilibrium, it results in a surplus because the price is higher than what consumers are willing to pay, leading to excess supply.

If the Government Sets a Floor on the Price of Wheat