Suppose a Price Floor Is Set by the Government Above

question 68

Multiple Choice

Suppose a price floor is set by the government above the market equilibrium price. Which of the following will result?

• A) There will be a surplus.
• B) The quantity demanded will exceed the quantity supplied.
• C) The demand curve will shift to the left.
• D) None of the above.

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Definitions:

Ratifies

To officially approve or confirm an agreement or contract, making it valid and legally binding.

Apparent Authority

A type of authority perceived by a third party that an agent seems to have in relation to the principal, regardless of whether such authority has been actually granted.

Principal

The primary party to a transaction, agreement, or contract, or the amount of money on which interest is paid or received.

Manifestations

Expressions or signs that something, especially a disease or a condition, is present.