-Refer to Table 3.3 to answer this question.Suppose that the government introduces an effective price floor that is $0.20 different from the equilibrium price.What will be the result?

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Quizplus · Accepted Answer

A price floor set $0.20 above the equilibrium price will result in a surplus, not a shortage, because the price floor is above the equilibrium price, leading to less quantity being sold than at equilibrium. The specific numbers (140 units, $1.90, etc.) cannot be accurately determined without additional information from Table 3.3, but the general effect of a price floor is to decrease the quantity sold from the equilibrium quantity.