Assume a Price Floor Is Imposed in the Wheat Market

question 26

Multiple Choice

Assume a price floor is imposed in the wheat market at the equilibrium price and that a price ceiling is imposed in the gasoline market at the equilibrium price. An increase in supply in both the wheat and gasoline markets will create:

• A)​surpluses in both the wheat and gasoline markets.
• B)​shortages in both the wheat and gasoline markets.
• C)​a surplus in the wheat market and an increase the quantity of gasoline traded.
• D)​a surplus in the wheat market and a shortage in the gasoline market.