If the government imposes a price floor on sugar that is above the market equilibrium price, it may also have to
A) establish programs to expand supply in the private sector
B) establish programs to reduce demand in the private sector
C) produce some sugar itself
D) purchase the surplus sugar

Question

Quizplus · Accepted Answer

When a price floor is set above the market equilibrium, it typically results in a surplus because the price is too high for consumers to purchase all of the goods produced. To address this surplus, the government may need to purchase the excess sugar itself to prevent waste and support the price floor.

If the Government Imposes a Price Floor on Sugar That