A price floor above the market clearing price typically results in I. an excess quantity supplied
II) a shortage
III) an excess quantity demand
A) I only
B) II only
C) III only
D) II and III only

Question

Quizplus · Accepted Answer

A price floor set above the market clearing price leads to an excess quantity supplied because producers are willing to supply more at the higher price, but consumers are not willing to buy as much, resulting in a surplus.

A Price Floor Above the Market Clearing Price Typically Results