Refer to the accompanying figure to answer the following questions.

-At the price of the binding price floor,by how much would the quantity supplied change from the market equilibrium?
A) The quantity supplied would increase by 32,000 units.
B) The quantity supplied would decrease by 18,000 units.
C) The quantity supplied would increase by 30,500 units.
D) The quantity supplied would decrease by 30,500 units.
E) The quantity supplied would decrease by 32,000 units.

Question

Refer to the accompanying figure to answer the following questions.
 
-At the price of the binding price floor,by how much would the quantity supplied change from the market equilibrium?
A) The quantity supplied would increase by 32,000 units. 
B) The quantity supplied would decrease by 18,000 units. 
C) The quantity supplied would increase by 30,500 units. 
D) The quantity supplied would decrease by 30,500 units. 
E) The quantity supplied would decrease by 32,000 units.

Quizplus · Accepted Answer

A binding price floor set above the market equilibrium price causes the quantity supplied to increase because suppliers are willing to supply more of the good at the higher price, leading to a surplus.

Refer to the Accompanying Figure to Answer the Following Questions