Suppose the equilibrium price of a tube of toothpaste is $2,and the government imposes a price floor of $3 per tube.As a result of the price floor,the

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When a price floor is imposed, it is set above the equilibrium price, which creates a situation where the quantity supplied exceeds the quantity demanded. In this case, consumers will be less willing to buy toothpaste at the higher price, which leads to a decrease in quantity demanded. However, firms will want to increase the quantity supplied as they now have an incentive to sell toothpaste at the higher price. Therefore, the correct choice is C. The demand curve does not shift, and the supply curve does not necessarily shift to the right. The quantity supplied of toothpaste does not stay the same, as firms now want to supply more toothpaste at the higher price.

Suppose the Equilibrium Price of a Tube of Toothpaste Is