Assume a price floor is imposed at the current equilibrium price in the market for lettuce. If the demand for lettuce then increases:
A)a surplus of lettuce will be created.
B)a shortage of lettuce will be created.
C)the quantity of lettuce traded remains the same.
D)the quantity of lettuce supplied will increase.

Question

Assume a price floor is imposed at the current equilibrium price in the market for lettuce. If the demand for lettuce then increases:
A)​a surplus of lettuce will be created.
B)​a shortage of lettuce will be created.
C)​the quantity of lettuce traded remains the same.
D)​the quantity of lettuce supplied will increase.

Quizplus · Accepted Answer

With a price floor set above the equilibrium price, suppliers will supply more lettuce than demanded, resulting in a surplus. However, if demand increases, the surplus will decrease, but the quantity supplied will still increase. Therefore, the correct choice is D.

Assume a Price Floor Is Imposed at the Current Equilibrium