-Refer to the above figure. A price control has been set which has led to a surplus. This means that a
A)price ceiling has been set at P₁.
B)price floor has been set at P₁.
C)price ceiling has been set at P₂.
D)price floor has been set at P₂.

Question

-Refer to the above figure. A price control has been set which has led to a surplus. This means that a
A)price ceiling has been set at P₁. 
B)price floor has been set at P₁. 
C)price ceiling has been set at P₂. 
D)price floor has been set at P₂.

Quizplus · Accepted Answer

A surplus occurs when a price floor is set above the equilibrium price, leading to excess supply.

-Refer to the Above Figure