Why does a surplus that occurs under a binding price floor increase over time?
A) Demand becomes more elastic.
B) Demand becomes more inelastic.
C) Demand and supply both become more elastic.
D) Demand and supply both become more inelastic.
E) Demand becomes more elastic,but supply becomes more inelastic.

Question

Quizplus · Accepted Answer

Over time, both demand and supply tend to become more elastic as consumers and producers adjust to the price floor, leading to a larger surplus.

Why Does a Surplus That Occurs Under a Binding Price