Final answer:
A price floor for milk set at $3.00 or $3.50 (option 2) would not cause a surplus if the equilibrium price is $3.60, because these options are at or below the equilibrium. Price floors above the equilibrium price would create a surplus.
Step-by-step explanation:
When governments set prices artificially, they can employ either price floors or price ceilings to control the market dynamics for a commodity. A price floor is established to ensure that the price does not fall below a certain level, which is often intended to protect producers. In the case of milk, if the equilibrium price is $3.60, a price floor that does not cause a surplus is one that is below or equal to this equilibrium point.
A price floor set at $3.00, $3.50, or $3.60 would not cause a surplus because these are all at or below the equilibrium price where demand meets supply. However, a price floor set above the equilibrium price, such as at $4.00 or $4.50, would lead to excess supply, also known as a surplus, because producers would be willing to supply more milk at this higher price than consumers would be willing to buy.
Therefore, the price floor for milk that would not cause a surplus is option 1) A price floor of $3.00 or 2) A price floor of $3.50, as these are the only options at or below the equilibrium price of $3.60.