-Refer to the above figure. If a price floor of $5 was set
A) the quantity sold would be 80 units.
B) the quantity sold would be 60 units.
C) the quantity demanded would be 100 units.
D) there would be a shortage of 20 units.

Question

-Refer to the above figure. If a price floor of $5 was set
A) the quantity sold would be 80 units. 
B) the quantity sold would be 60 units. 
C) the quantity demanded would be 100 units. 
D) there would be a shortage of 20 units.

Quizplus · Accepted Answer

A price floor set above the equilibrium price results in a surplus. If the price floor is $5 and the equilibrium price is lower, the quantity sold would be limited to the quantity demanded at that price, which is 60 units.

-Refer to the Above Figure