Final answer:
A price floor set above equilibrium causes a surplus but does not shift the supply or demand curve; similarly, a price ceiling below equilibrium results in a shortage with no shift in the curves. Hence, neither price floors nor price ceilings cause the demand or supply curve to shift.
Step-by-step explanation:
The question pertains to economic concepts, specifically the impact of government interventions like price floors and price ceilings on market equilibrium within a supply chain. A price floor, set by the government, is a minimum price that can be charged for a good or service. When a price floor is set above the equilibrium price, it does not shift the demand or supply curves; instead, it creates a scenario of excess supply (a surplus) because the price is too high for consumers to purchase all of the goods supplied by producers.
Similarly, a price ceiling is a maximum price, and when it is positioned below the equilibrium price, it leads to excess demand (a shortage) because the price is too low for producers to supply all the goods demanded by consumers. The price ceiling also does not shift demand or supply but results in a different market outcome compared to the equilibrium situation.
- For question 11, the correct answer is d. neither.
- For question 12, the correct answer is also d. neither.