-Refer to the above figure. If a price floor of $5 was set
A) the quantity sold would be 80 units.
B) there would be a surplus of 40 units.
C) there would be a shortage of 40 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) there would be a surplus of 40 units. 
C) there would be a shortage of 40 units. 
D) there would be a shortage of 20 units.

Quizplus · Accepted Answer

A price floor set above the equilibrium price (which appears to be lower than $5 based on the context) would result in a surplus because the quantity supplied at that price would exceed the quantity demanded. The specific numbers (80 units sold, 40 units surplus) cannot be confirmed without the figure, but the concept of a surplus is correct for a price floor above equilibrium.

-Refer to the Above Figure