Use the following table to answer the next two questions.

-A nonbinding price floor has the following consequences:
A) There will be downward pressure on prices until quantity demanded equals quantity supplied.
B) There will be upward pressure on prices until quantity demanded equals quantity supplied.
C) There are no consequences to a nonbinding price floor.
D) The quantity demanded will always exceed the quantity supplied.
E) The quantity demanded will always be smaller than the quantity supplied.

Question

Use the following table to answer the next two questions.
 
-A nonbinding price floor has the following consequences:
A) There will be downward pressure on prices until quantity demanded equals quantity supplied. 
B) There will be upward pressure on prices until quantity demanded equals quantity supplied. 
C) There are no consequences to a nonbinding price floor. 
D) The quantity demanded will always exceed the quantity supplied. 
E) The quantity demanded will always be smaller than the quantity supplied.

Quizplus · Accepted Answer

A nonbinding price floor is a minimum price set above the equilibrium price, but it does not affect the market because it is not binding. Since it does not affect the market, there are no consequences to a nonbinding price floor.

Use the Following Table to Answer the Next Two Questions