A. at the equilibrium and causes shortage
B. above the equilibrium and causes shortage
C. below the equilibrium and causes shortage
D. above the equilibrium and causes surplus
Correct Answer: Option B
B. above the equilibrium and causes shortage
Explanation
A price floor is a government- or group-imposed price control or limit on how low a price can be charged for a product, good, commodity, or service.
A price floor is the lowest legal price a commodity can be sold at. Price floors are used by the government to prevent prices from being too low. The most common price floor is the minimum wage–the minimum price that can be paid for labor. For a price floor to be effective, it must be set above the equilibrium price.
Veterinary medicine is the branch of medicine that deals with the prevention, diagnosis, and treatment…
Anthropology is the scientific study of human beings and their cultures. It encompasses a wide…
Sociology is the scientific study of human society, culture, and behavior. It examines the social…
Social Work is a profession dedicated to helping individuals, families, and communities to cope with…
Religious studies is an academic discipline that explores the beliefs, practices, and history of various…
Public administration is the field of study and practice that focuses on the organization and…