price fixed above the equilibrium is to
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Correct Answer: Option A
Explanation:
When a price floor is set above the equilibrium price, quantity supplied will exceed quantity demanded, and excess supply or surpluses will result. This is usually done to protect and encourage production, as producers will be wiling to produce and supply to the markets in large quantity when the price is high.
When a price floor is set above the equilibrium price, quantity supplied will exceed quantity demanded, and excess supply or surpluses will result. This is usually done to protect and encourage production, as producers will be wiling to produce and supply to the markets in large quantity when the price is high.