If a price floor imposes a binding constraint on a market, then _____.
A)the equilibrium price should be above the price floor
B)the quantity demanded should exceed the quantity supplied
C)sellers cannot sell all they want to sell at the price floor
D)buyers cannot buy all they want to buy at the price floor
E)the equilibrium price should be equal to the price floor

Question

Quizplus · Accepted Answer

A price floor set above the equilibrium price creates a surplus because sellers cannot sell all they want at the higher price, leading to excess supply.

If a Price Floor Imposes a Binding Constraint on a Market