Assume there is a price floor imposed on a good which is above the equilibrium price. Which of the following changes would reduce the size of the surplus?
A)An increase in demand.
B)A decrease in demand.
C)An increase in supply.
D)Any of the above.

Question

Assume there is a price floor imposed on a good which is above the equilibrium price. Which of the following changes would reduce the size of the surplus?
A)​An increase in demand.
B)​A decrease in demand.
C)​An increase in supply.
D)​Any of the above.

Quizplus · Accepted Answer

An increase in demand would reduce the size of the surplus caused by a price floor above the equilibrium price, as it would lead to more of the surplus goods being purchased.

Assume There Is a Price Floor Imposed on a Good