Refer to the accompanying figure for the following questions. -The accompanying figure describes the market for gasoline in a local community.If the government were to place a price floor at P₃,what would be 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.

Question

Quizplus · Accepted Answer

A price floor set above the equilibrium price leads to a surplus because the quantity supplied exceeds the quantity demanded. The specific number (75,000 units) would be determined by the difference between the quantity supplied and the quantity demanded at the price floor level.

Refer to the Accompanying Figure for the Following Questions