When a Price Floor Is Imposed Above the Equilibrium Price

question 6

Multiple Choice

When a price floor is imposed above the equilibrium price of a commodity,

• A) quantity demanded will be greater than quantity supplied for the good.
• B) the quantity demanded by consumers will be greater than at the equilibrium price.
• C) a shortage of the good will develop.
• D) a surplus of the good will develop.

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Definitions:

Peanut Butter

A spread made from ground, roasted peanuts, often used in sandwiches and as a cooking ingredient.

Equilibrium Price

The price at which the quantity of a product demanded by consumers equals the quantity supplied by producers, leading to market balance.

Buyers

Entities or persons that buy products or services.

Sellers

Individuals or entities that offer goods or services for sale to consumers or other businesses in the market.