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If a price floor is set above the equilibrium price,

A) there will be a surplus.

B) there will be a shortage.

C) there will be excess demand.

D) quantity demanded will equal the quantity supplied.

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Bunny Greenfelder
Bunny GreenfelderLv2
29 May 2020
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Related questions

1. Market equilibrium occurs when

a. demand equals supply

b. quantity demanded equals quantity supplied

c. The consumer expectations match the producer's expectations

d. Efficiency and equal distribution are achieved 

 

2. If a surplus exists in a market, then

a. Price is above market equilibrium and quantity demanded is less than quantity supplied

b. Price is below market equilibrium and quantity demanded is less than quantity supplied

c. Price is above market equilibrium and quantity demanded is greater than quantity supplied

d. Price is below market equilibrium and quantity demanded is greater than quantity supplied

 

3. When the price falls below market equilibrium

a. A surplus occurs

b. A shortage occurs

c. There will be an increase in quantity supplied

d. There will be a leftward shift of the supply curve

 

28) Consider the market for iron ore, an important industrial input. Suppose the government sets a price floor below the free-market equilibrium price. The result will be A) a continuation of the free-market equilibrium price and quantity B) the quantity demanded will exceed quantity supplied and there will be a shortage in the market. C) the quantity supplied will exceed quantity demanded and there will be a surplus in the market. D) a new free-market equilibrium at a lower price and higher output level. E) increased government revenue.

If the price is above the equilibrium level, competition among sellers to reduce the resulting:

A. surplus will increase quantity demanded and decrease quantity supplied.

B. shortage will decrease quantity demanded and increase quantity supplied.

C. surplus will decrease quantity demanded and increase quantity supplied.

D. shortage will increase quantity demanded and decrease quantity supplied.

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