After a price floor is imposed above the equilibrium price, what quantity will sellers be able to sell in the market?

• A. The maximum possible quantity
• B. The quantity supplied at the price floor
• C. The quantity demanded at the price floor
• D. The equilibrium quantity

Answer: (C)

Verified step by step guidance

1. Step 1: Understand what a price floor is. A price floor is a legally imposed minimum price set above the equilibrium price, meaning sellers cannot sell below this price.
2. Step 2: Recognize that when the price floor is above equilibrium, the quantity supplied by sellers increases because the higher price incentivizes more production.
3. Step 3: At the same time, the quantity demanded by buyers decreases because the higher price discourages consumption.
4. Step 4: Since the market cannot clear at the price floor, the actual quantity sold is limited by the lower of the two quantities: quantity demanded or quantity supplied.
5. Step 5: Therefore, sellers will only be able to sell the quantity demanded at the price floor, because buyers will not purchase more than that amount at the higher price.