What happens if an effective price floor is placed on the market for steel? a. There will be a surplus of steel. b. The price of steel will be lower than the equilibrium price. c. The quality of steel produced will decrease. d. There will be a shortage of steel.

What happens if an effective price floor is placed on the market for steel? a. There will be a surplus of steel. b. The price of steel will be lower than the equilibrium price. c. The quality of steel produced will decrease. d. There will be a shortage of steel.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter3: Supply And Demand: Theory

Section: Chapter Questions

Problem 11QP

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Question

What happens if an effective price floor is placed on the market for steel?

	a.	There will be a surplus of steel.
	b.	The price of steel will be lower than the equilibrium price.
	c.	The quality of steel produced will decrease.
	d.	There will be a shortage of steel.

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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