When a Price Floor Is Above the Equilibrium Price

question 196

Multiple Choice

When a price floor is above the equilibrium price,

• A) quantity demanded will exceed quantity supplied, so there will be a shortage.
• B) quantity supplied will exceed quantity demanded, so there will be a surplus.
• C) the market will be in equilibrium.
• D) This is a trick question because price floors are generally set below the equilibrium price.

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