-Refer to the above figure. A price support set at P₃ will
A)lead to a surplus of Q₃ minus Q₁.
B)lead to a shortage of Q₃ minus Q₁.
C)lead to an equilibrium quantity of Q₂.
D)be ineffective.

Question

-Refer to the above figure. A price support set at P₃ will
A)lead to a surplus of Q₃ minus Q₁. 
B)lead to a shortage of Q₃ minus Q₁. 
C)lead to an equilibrium quantity of Q₂. 
D)be ineffective.

Quizplus · Accepted Answer

A price support set above the equilibrium price will result in a surplus, as the quantity supplied (Q₃) exceeds the quantity demanded (Q₁).

-Refer to the Above Figure