-Refer to the above figure. Other things being equal, when the government imposes a price floor at P₂, then we would expect A) the quantity demanded is Q₂. B) a surplus will occur. C) price to decline until an equilibrium is achieved at P₀. D) consumers to bid against each other for goods and force the price even higher.

Question

Quizplus · Accepted Answer

A price floor set above the equilibrium price leads to a surplus because the quantity supplied exceeds the quantity demanded at that price.

-Refer to the Above Figure