Which of the following observations would be consistent with the imposition of a binding price floor on a market? After the price floor becomes effective,
A)a smaller quantity of the good is bought and sold.
B)a larger quantity of the good is demanded.
C)a smaller quantity of the good is supplied.
D)the price falls below the equilibrium price.

Question

Quizplus · Accepted Answer

A binding price floor is set above the equilibrium price, leading to a surplus where the quantity supplied exceeds the quantity demanded, resulting in a smaller quantity being bought and sold.

Which of the Following Observations Would Be Consistent with the Imposition