After a binding price floor becomes effective, a
A)smaller quantity of the good is exchanged.
B)a larger quantity of the good is demanded.
C)a smaller quantity of the good is supplied.
D)All of the above are correct.

Question

After a binding price floor becomes effective, a
A)​smaller quantity of the good is exchanged.
B)​a larger quantity of the good is demanded.
C)​a smaller quantity of the good is supplied.
D)​All of the above are correct.

Quizplus · Accepted Answer

A binding price floor, set above the equilibrium price, leads to a surplus because the quantity supplied exceeds the quantity demanded, resulting in a smaller quantity of the good being exchanged.

After a Binding Price Floor Becomes Effective, a