Whenever a Price Floor Is Imposed Above Equilibrium Price, It

question 137

Multiple Choice

Whenever a price floor is imposed above equilibrium price, it is true that:

• A)​supply will increase due to a higher price and a surplus will result.
• B)​supply will increase due to a higher price until it just equals the quantity demanded.
• C)​demand will increase due to a higher price and a shortage will result.
• D)​quantity supplied will exceed the quantity demanded.

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Definitions:

Demand

The quantity of a good or service that buyers are willing and able to purchase at various prices at a given time.

World Price

The international market price at which goods can be bought or sold, often used in the context of trade policies and competition.

Tariff Revenue

is the income generated by a government from the imposition of tariffs, which are taxes on imported goods.

Tariff

A tax imposed by a government on goods and services imported from other countries to protect domestic industries or to generate revenue.