a-government-sets-a-price-floor-above-the-equilibrium-price-for-milk-what-is-the

Question

A government sets a price floor above the equilibrium price for milk. What is the likely outcome in the market?

Accepted Answer

A surplus of milk will occur.

Answer

A shortage of milk will occur.

Answer

The market will reach a new equilibrium.

Answer

The price floor will have no effect.