D Question 9 1 pts Suppose the equilibrium price of oranges is $0.79 per pound,

Question

D Question 9 1 pts Suppose the equilibrium price of oranges is $0.79 per pound, but the government takes steps to prevent price from dropping below $0.93 per pound. The likely result will be a: O higher equilibrium price for oranges as the demand curve shifts to the right O higher equilibrium price for oranges as the supply curve shifts to the left O surplus of oranges as the price floor keeps the market from reaching equilibrium O shortage of oranges as the price floor keeps the market from reaching equilibrium.

Explanation / Answer

Option C.

The binding price floor above the market equilibrium price of oranges will result in surplus of oranges as quantity supplied will exceed the quantity demanded at a higher price as compared to market price of oranges.

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