If a price floor is imposed at $15 per unit when the equilibrium market price is $12,there will be
A) no surplus or shortage.
B) a surplus.
C) a shortage.
D) a downward pressure on prices.
E) an upward pressure on prices.

Question

Quizplus · Accepted Answer

A price floor set above the equilibrium price ($15 when the equilibrium is $12) leads to a surplus because the minimum price at which goods can be sold is higher than what consumers are willing to pay, resulting in excess supply.

If a Price Floor Is Imposed at $15 Per Unit