If a price floor is set below the equilibrium price,
A) quantity demanded will be less than quantity supplied.
B) there will be a surplus.
C) there will be a shortage.
D) the floor will be ineffective.

Question

Quizplus · Accepted Answer

When a price floor is set below the equilibrium price, it does not affect the market because the market price is already above the floor. Therefore, the price floor is ineffective.

If a Price Floor Is Set Below the Equilibrium Price