A Price Floor Set Above an Equilibrium Price Tends to Cause

question 118

Multiple Choice

A price floor set above an equilibrium price tends to cause persistent imbalances in the market because

• A) Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage.
• B) Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus.
• C) Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage.
• D) Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.

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Definitions:

Product Layout

A way to arrange a manufacturing business by placing equipment in an assembly line.

Auto Assembly Lines

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product efficiently.

Process Layout

A facility arrangement in which equipment or workstations are grouped based on their function, allowing for the handling of a variety of products or tasks in a non-linear flow.

Increased Handling

Refers to scenarios where there is an elevation in the processes or steps required to manage or move products, often leading to higher operational costs and potentially impacting efficiency.