A price floor would be established in cases where the government ...

[drink]

A price floor would be established in cases where the government believed the market equilibrium price would:
 a. result in a surplus.
  b. be too high.
  c. result in a shortage.
  d. be too low.
  e. yield excess profits.

Question 2

A market consequence of a price floor program is that:
 a. a shortage of the product will develop.
  b. producers will stop supplying the product.
  c. some rationing device must then be instituted.
  d. a surplus of the product will develop.
  e. there will be an excess demand for the product.

[mjenn52]

Answer to Question 1

d

Answer to Question 2

d