Suppose that the equilibrium price is $20 and the government sets the price floor at $30. The result of this price floor is:

Name: Suppose that the equilibrium price is $20 and the government sets the price floor at $30. The result of this price floor is:
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Question

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A price floor set above the equilibrium price ($30 instead of $20) leads to a surplus because the higher price encourages producers to supply more than consumers are willing to buy at that price.

Suppose That the Equilibrium Price Is $20 and the Government