The imposition of a binding price floor on a market

Name: The imposition of a binding price floor on a market
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When a binding price floor is imposed on a market, the minimum legal price is set above the equilibrium price, causing an excess supply (quantity supplied is greater than quantity demanded). This leads to a surplus of the good, and some sellers will not be able to sell their goods, resulting in a decrease in quantity demanded. Therefore, choice B is the correct answer.

The Imposition of a Binding Price Floor on a Market