If a price floor is set above the equilibrium price,
A) quantity demanded will equal 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 above the equilibrium price, it results in a surplus because the higher price encourages producers to supply more than consumers are willing to buy at that price.

If a Price Floor Is Set Above the Equilibrium Price