Refer to the accompanying figure for the next questions. -The accompanying figure describes the market for gasoline in a local community. If the government were to place a price floor at P₃, predict the resulting surplus or shortage. A) There would be a shortage of 75,000 units. B) There would be a surplus of 75,000 units. C) There would be neither a shortage nor a surplus. D) There would be a shortage of 150,000 units. E) There would be a surplus of 150,000 units.

Question

Quizplus · Accepted Answer

At a price floor of P3, the quantity supplied (Qs) is 150,000 units, while the quantity demanded (Qd) is 75,000 units. Therefore, there would be a surplus of 75,000 units.

Refer to the Accompanying Figure for the Next Questions