-Refer to the accompanying figure. If the government has a budget of $300,000 to purchase surplus shampoo, what is the maximum possible floor price that could be imposed?
A) $1
B) $2
C) $3
D) $4
E) $5

Question

-Refer to the accompanying figure. If the government has a budget of $300,000 to purchase surplus shampoo, what is the maximum possible floor price that could be imposed?
A) $1 
B) $2 
C) $3 
D) $4 
E) $5

Quizplus · Accepted Answer

At a floor price of $3, the quantity supplied is 200,000 units and the quantity demanded is 100,000 units, resulting in a surplus of 100,000 units. To purchase this surplus at $3 each, the government would spend $300,000, which matches their budget.

-Refer to the Accompanying Figure