A minimum price set above the equilibrium price is a

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If a price floor is set above the equilibrium price in a market rev: 05_07_2018 Multiple Choice the quantity demanded will exceed the quantity supplied. rationing will be unnecessary. shortages will develop. the quantity supplied will exceed the quantity demanded.

Answered by admin @


Answer:

the quantity supplied will exceed the quantity demanded.

Explanation:

A price floor is when the government or an agency of the government sets the minimum price of a product. A price floor is binding if it is set above equilibrium price.

Because price is set above equilibrium price, quantity supplied would exceed quantity demanded and there would be a surplus.

If price were set below equilibrium price (the price floor is non-binding) there would be shortages as quantity demanded would exceed quantity supplied


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