Starting from an equilibrium position,
A)the imposition of a price floor below the equilibrium price will increase the quantity demanded.
B)the imposition of a price floor below the equilibrium price will decrease the quantity exchanged.
C)the imposition of a price floor above the equilibrium price will decrease the quantity demanded.
D)the imposition of a price floor above the equilibrium price will increase the quantity exchanged.

Question

Starting from an equilibrium position,
A)​the imposition of a price floor below the equilibrium price will increase the quantity demanded.
B)​the imposition of a price floor below the equilibrium price will decrease the quantity exchanged.
C)​the imposition of a price floor above the equilibrium price will decrease the quantity demanded.
D)​the imposition of a price floor above the equilibrium price will increase the quantity exchanged.

Quizplus · Accepted Answer

Imposing a price floor above the equilibrium price creates a situation where the price is too high for the quantity demanded, resulting in a surplus. Consumers are less willing to buy goods at higher prices, leading to a decrease in quantity demanded. This surplus also leads to a decrease in quantity exchanged, as producers are unable to sell all their goods at the higher price.

Starting from an Equilibrium Position