If the price floor is set below the equilibrium price,
A) quantity demanded will be less than quantity supplied.
B) there will be a surplus.
C) there will be a shortage.
D) the floor will be ineffective.

Question

Quizplus · Accepted Answer

A price floor set below the equilibrium price is ineffective because it does not prevent the market from reaching equilibrium, where quantity demanded equals quantity supplied.

If the Price Floor Is Set Below the Equilibrium Price