Victor is a senator from Kansas who wants to help farmers.He has worked to encourage the passage of a law that would impose a binding price floor on wheat.What would he expect his critics to say?
A) The binding price floor will discourage farmers from planting wheat and they will plant other crops instead.
B) The binding price floor will encourage consumers to eat too much wheat.
C) The binding price floor will discourage farmers from using the most productive farming methods available.
D) The binding price floor will cause a shortage of wheat.
E) The binding price floor will cause a surplus of wheat that farmers will be unable to sell.

Question

Quizplus · Accepted Answer

A binding price floor set above the equilibrium price would lead to a surplus of wheat because the quantity supplied by producers would exceed the quantity demanded by consumers at that price. This surplus means farmers would have excess wheat they cannot sell at the floor price.

Victor Is a Senator from Kansas Who Wants to Help