The Consequence of a Price Floor Set Below the Equilibrium

question 56

Multiple Choice

The consequence of a price floor set below the equilibrium price is

• A) a surplus,where the quantity demanded exceeds the quantity supplied.
• B) a shortage,where the quantity demanded exceeds the quantity supplied.
• C) a surplus,where the quantity supplied exceeds the quantity demanded.
• D) a shortage,where the quantity supplied exceeds the quantity demanded.
• E) nothing; the price floor will have no impact on the quantity demanded or the quantity supplied.

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Definitions:

Pollution

The introduction of contaminants into the natural environment, causing adverse changes and impacting human health and ecological balance.

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The total amount of goods or services produced by a business, industry, or economy within a given period.

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A situation in markets where the prices of assets inflate significantly beyond their intrinsic value, often followed by a crash.

Emissions Offsets Program

A policy or program that allows companies to compensate for their carbon emissions by investing in environmental projects.