Use the following to answer questions:
Figure: Water Market
-(Figure: Water Market) Refer to the figure. If a price floor in the diagram gets set at $8 a gallon, how big is the shortage or surplus?
A) 60,000 gallons in surplus
B) 120,000 gallons in surplus
C) 60,000 gallons in shortage
D) 12,000 gallons in shortage

Question

Use the following to answer questions:
Figure: Water Market 
-(Figure: Water Market) Refer to the figure. If a price floor in the diagram gets set at $8 a gallon, how big is the shortage or surplus?
A) 60,000 gallons in surplus 
B) 120,000 gallons in surplus 
C) 60,000 gallons in shortage 
D) 12,000 gallons in shortage

Quizplus · Accepted Answer

A price floor set above the equilibrium price creates a surplus. If the price floor is at $8, the quantity supplied exceeds the quantity demanded, resulting in a surplus of 60,000 gallons.

Use the Following to Answer Questions