If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium.

Question

Quizplus · Accepted Answer

A price floor set below the equilibrium price has no effect on the market because the market price is already higher than the floor, so the quantity sold remains determined by the market equilibrium.

If the Equilibrium Price of an Airline Ticket Is $500