why-is-a-price-floor-set-above-the-equilibrium-price-considered-effective

Question

Why is a price floor set above the equilibrium price considered effective?

Accepted Answer

It creates a surplus by preventing the price from falling to equilibrium.

Answer

It has no effect on the market as it is above equilibrium.

Answer

It creates a shortage by preventing the price from rising to equilibrium.

Answer

It balances the market by equating supply and demand.