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AP® Microeconomics

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Moderate

Price Floors: Impact in Market for Boysenberries

APMICR-ECWJC1

The government decides to impose an effective price floor in the perfectly competitive market for boysenberries. Which of the following correctly explains what will happen in the market as a result?

A

There will be a shortage in the market because supply will decrease while the demand increases.

B

There will be a surplus in the market because supply will increase while the demand decreases.

C

There will be a shortage in the market because the quantity supplied will decrease while the quantity demanded will increase.

D

There will be a surplus in the market because the quantity supplied will increase while the quantity demanded will decrease.

E

There will be neither a shortage nor a surplus because the market will ration the good.