QuestionJune 14, 2025

The most likely impact of an effective price floor in a market is: the supply curve will shift to the right. a surplus will develop. the demand curve will shift to the left. a shortage will develop.

The most likely impact of an effective price floor in a market is: the supply curve will shift to the right. a surplus will develop. the demand curve will shift to the left. a shortage will develop.
The most likely impact of an effective price floor in a market is:
the supply curve will shift to the right.
a surplus will develop.
the demand curve will shift to the left.
a shortage will develop.

Solution
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Answer

a surplus will develop. Explanation 1. Define Price Floor A price floor is a minimum price set above the equilibrium price. 2. Analyze Impact on Market When a price floor is effective (set above equilibrium), it results in higher prices than consumers are willing to pay at that quantity. 3. Determine Resulting Market Condition At this higher price, quantity supplied exceeds quantity demanded, leading to excess supply.

Explanation

1. Define Price Floor<br /> A price floor is a minimum price set above the equilibrium price.<br />2. Analyze Impact on Market<br /> When a price floor is effective (set above equilibrium), it results in higher prices than consumers are willing to pay at that quantity.<br />3. Determine Resulting Market Condition<br /> At this higher price, quantity supplied exceeds quantity demanded, leading to excess supply.
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