Which of the following is a consequence of a non-binding price floor?
A) There will be downward pressure on prices until quantity demanded equals quantity supplied.
B) There will be upward pressure on prices until quantity demanded equals quantity supplied.
C) There are no consequences to a non-binding price floor.
D) The quantity demanded will always exceed the quantity supplied.
E) The quantity demanded will always be smaller than the quantity supplied.

Question

Quizplus · Accepted Answer

A non-binding price floor means that the market price is already above the floor, so there is no effect on the quantity demanded or supplied. Therefore, there are no consequences to a non-binding price floor.

Which of the Following Is a Consequence of a Non-Binding