-Refer to the above figure. A price floor of $60 results in
A) a shortage of 100 units.
B) a shortage of 200 units.
C) a surplus of 100 units.
D) a surplus of 200 units.

Question

-Refer to the above figure. A price floor of $60 results in
A) a shortage of 100 units. 
B) a shortage of 200 units. 
C) a surplus of 100 units. 
D) a surplus of 200 units.

Quizplus · Accepted Answer

A price floor set above the equilibrium price (which is lower than $60 in this case) leads to a surplus because the quantity supplied at that price is greater than the quantity demanded, resulting in excess supply or a surplus.

-Refer to the Above Figure