When a government imposes a price floor on a good that is above the market equilibrium price
A)a surplus will develop.
B)a shortage will develop.
C)producers will increase their sales price.
D)consumers will increase their demand for the good.

Question

Quizplus · Accepted Answer

When a government imposes a price floor on a good that is above the market equilibrium price, it creates a situation where the price is artificially high, which leads to a surplus. Producers are incentivized to increase their production, but with the higher price, consumers demand less, resulting in excess supply or a surplus.

When a Government Imposes a Price Floor on a Good