Regarding Price Floors on Prices, the Result of a Higher-Than-Equilibrium

question 155

Multiple Choice

Regarding price floors on prices, the result of a higher-than-equilibrium market price is

• A)a loss in producer surplus and a gain in consumer surplus.
• B)a gain in producer surplus and a loss in consumer surplus.
• C)a loss in both producer surplus and consumer surplus.
• D)a gain in both producer surplus and consumer surplus.
• E)no change in both producer surplus and consumer surplus.

---

Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level at a specific time.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that suppliers are willing to offer for sale, holding other factors constant.

Equilibrium Price

The market price at which the supply of an item equals the quantity demanded.

Equilibrium Quantity

The volume of goods or services that are both presented and required at the price where supply meets demand in a market.