Refer to the Accompanying Figure for the Next Questions

question 101

Multiple Choice

Refer to the accompanying figure for the next questions.
-The accompanying figure describes the market for gasoline in a local community. If the government were to place a price floor at P₃, predict the resulting surplus or shortage.

• A) There would be a shortage of 75,000 units.
• B) There would be a surplus of 75,000 units.
• C) There would be neither a shortage nor a surplus.
• D) There would be a shortage of 150,000 units.
• E) There would be a surplus of 150,000 units.