Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia.What will be the likely effect on the market for sparkling wine in Vinyardia?
A)Quantity demanded will decrease, quantity supplied will increase, and a surplus will result.
B)Quantity demanded will increase, quantity supplied will decrease, and a surplus will result.
C)Quantity demanded will decrease, quantity supplied will increase, and a shortage will result.
D)Quantity demanded will increase, quantity supplied will decrease, and a shortage will result.

Question

Quizplus · Accepted Answer

A price floor set above the equilibrium price will lead to a decrease in quantity demanded and an increase in quantity supplied, resulting in a surplus.

Suppose a Price Floor on Sparkling Wine Is Proposed by the Health