Author Question: Which of the following is correct when a price floor is set above the equilibrium price? a. ... (Read 20 times)

imowrer · **on:** Jul 1, 2018

Which of the following is correct when a price floor is set above the equilibrium price?
a. quantity supplied is less than quantity demanded at the set price
b. quantity supplied is equal to quantity demanded at the set price
c. at the set price there will be a shortage
d. The market price is greater than the price floor
e. quantity supplied exceeds quantity demanded at the set price

Question 2

Suppose the current equilibrium price of pizza is 5 . If the government decides the price of pizza cannot rise above 4, the result of this policy would be
a. a shortage
b. a surplus
c. that the market would remain in equilibrium but with a larger quantity bought and sold than at 5
d. at the 4 price, the quantity sold would be greater than the quantity bought
e. a shift of demand to the right