You are a senator from Kansas who wants to help farmers.You have worked to encourage the passage of a law that would impose a binding price floor on wheat.What would you expect your critics to say?
A) The binding price floor will discourage farmers from planting wheat and they will plant other crops instead.
B) The binding price floor will encourage consumers to eat too much wheat.
C) The binding price floor will discourage farmers from using the most productive farming methods available.
D) The binding price floor will cause a shortage of wheat.
E) The binding price floor will cause a surplus of wheat that farmers will be unable to sell.

Question

Quizplus · Accepted Answer

A binding price floor set above the equilibrium price will result in a surplus because the quantity supplied will exceed the quantity demanded at that price level.

You Are a Senator from Kansas Who Wants to Help