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Why does a surplus exist under a binding price floor?

a. It makes the price so low that the quantity demanded exceeds the quantity supplied on the legal market.

b. It encourages sellers to produce less of the product.

c. It makes the price so high that the quantity supplied exceeds the quantity demanded in the legal market.

d. It encourages buyers to purchase more of the product.

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Divya Singh
Divya SinghLv10
24 Sep 2020
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Related questions

When the price of a good is higher than the equilibrium price,

A. a shortage will exist
B. buyers desire to purchase more than is produced.
C. sellers desire to produce and sell more than buyers wish to purchase
D. quantity demanded exceeds quantity supplied

 

A surplus of cardboard boxes means that:

A. At the current price of a cardboard box, the quantity demanded exceeds the quantity supplied

B. The current price of a cardboard box is less than the equilibrium price

C. At the current price of a cardboard box, the quantity demanded equal the quantity supplied and the price will fall to restore equilibrium

D. At the current price of a cardboard box, the quantity demanded is less than the quantity supplied

E. More information is needed to determine if the price of cardboard boxes is higher than, lower than, or equal to the equilibrium price.

If, at the current price, there is a surplus of a good, then 
 
a. sellers are producing more than buyers wish to buy. 
b. the market must be in equilibrium. 
c. the price is below the equilibrium price. 
d. quantity demanded equals quantity supplied.

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