Use the Data in the Following Table to Explain the Economic

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The Answer is A price floor means that the price is not allowed to fall below a minimum price set by government.If the price floor is above the competitive equilibrium price of $7, a surplus of the product would result.If the price floor was set at $8, the quantity demanded would be 4,000 units but the quantity supplied would be 5,500 units for a surplus of 1,500 units.At a price floor of $9, the surplus would be 3,000 units, and with a price floor of $10, the surplus would be 4,500 units.A price floor interferes with the rationing function of price that serves to balance the decisions of suppliers and demanders.The price floor that produces a surplus indicates that resources are being overallocated and that there is economic inefficiency; output is being produced which consumers do not want to purchase at the price floor.

Use the Data in the Following Table to Explain the Economic

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