When the government sets a price floor which is below the equilibrium price
A) a surplus will develop.
B) a shortage will develop.
C) the equilibrium price will be maintained.
D) a price ceiling will follow.

Question

Quizplus · Accepted Answer

When the government sets a price floor below the equilibrium price, it does not affect the market because the market price is already above the floor. Therefore, the equilibrium price is maintained.

When the Government Sets a Price Floor Which Is Below