what-is-the-consequence-of-setting-an-effective-price-floor-above-the-equilibriu

Question

What is the consequence of setting an effective price floor above the equilibrium price?

Accepted Answer

A surplus occurs because quantity supplied exceeds quantity demanded.

Answer

The market reaches a new equilibrium with decreased demand.

Answer

The market remains unaffected as prices adjust naturally.

Answer

A shortage occurs because quantity demanded exceeds quantity supplied.