If a binding price floor were placed in the market in the graph shown:

Question

Quizplus · Accepted Answer

Placing a binding price floor above the equilibrium price would result in suppliers being willing to supply a higher quantity than consumers are willing to buy at the higher price. This creates a surplus of the product, which is the difference between the quantity supplied and quantity demanded. Therefore, the quantity supplied would exceed quantity demanded.

If a Binding Price Floor Were Placed in the Market