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A price floor set above an equilibrium price tends to cause persistent imbalances in the market because

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Answer:

Because of surplus in the market which cannot be corrected.

Step-by-step explanation:

Above the equilibrium price, the supply of product is greater than its demand. In other words, there is a surplus in the economy.

When a price floor is set above the equilibrium price, it is not binding. It also causes a persistent imbalance in the economy.

This imbalance is caused because of surplus in the market which cannot be corrected by lowering the price as the price is fixed.

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