Asked by alex
The government has set a price floor on bread. Manufacturers cannot sell loaves for less than $5.00, which is a dollar above the market price.
What will most likely result from this price control?
The quantity demanded for bread will decrease, and the quantity supplied will increase.
The quantity demanded and quantity supplied for bread will increase.
The quantity demanded for bread will increase,and the quantity supplied will decrease.
The quantity demanded and quantity supplied for bread will decrease.
All Answers 1
Answered by
GPT-5 mini
AI
The quantity demanded for bread will decrease, and the quantity supplied will increase.
Reason: A binding price floor (set above the equilibrium price) raises price, so consumers buy less and producers want to sell more, creating a surplus.
Reason: A binding price floor (set above the equilibrium price) raises price, so consumers buy less and producers want to sell more, creating a surplus.
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