The excess supply caused by a binding price floor set above the equilibrium price will be greatest if O both supply and demand are inelastic. O demand is inelastic and supply is elastic. O supply is inelastic and demand is elastic. O both supply and demand are elastic. O The elasticities of supply and demand are irrelevant for the size of the excess surplus.

The excess supply caused by a binding price floor set above the equilibrium price will be greatest if O both supply and demand are inelastic. O demand is inelastic and supply is elastic. O supply is inelastic and demand is elastic. O both supply and demand are elastic. O The elasticities of supply and demand are irrelevant for the size of the excess surplus.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 5CQQ: An increase in the supply of a good will decrease the total revenue producers receive if a. the...

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