One of the effects of a price floor (set above equilibrium price)is
A) a surplus.
B) higher-quality goods are produced.
C) more satisfied customers.
D) all of the above
E) none of the above

Question

Quizplus · Accepted Answer

A price floor set above equilibrium price creates a surplus because suppliers are willing to supply more at the higher price but consumers are unwilling or unable to purchase as much at the higher price, leading to excess supply. Higher-quality goods and more satisfied customers are not necessarily effects of a price floor.

One of the Effects of a Price Floor (Set Above