Which of the following will likely occur when price floors in agriculture are implemented?
A) Quantity supplied will exceed quantity demanded.
B) Quantity demanded will exceed quantity supplied.
C) Farmland will be underutilized.
D) Supply will decrease.

Question

Quizplus · Accepted Answer

Price floors set above the equilibrium price cause a surplus in the market because the quantity supplied exceeds the quantity demanded at that price. This is because producers are willing to supply more at the higher price, but consumers are not willing to buy as much.

Which of the Following Will Likely Occur When Price Floors