JAMB - Economics (2022 - No. 54)
A price floor is usually fixed
at the equilibrium and causes no shortage
above the equilibrium and causes shortage
below the equilibrium and causes surpluses
above the equilibrium and causes surpluses
Explanation
Price floor or minimum price legislation is when price is fixed above the equilibrium. When the government fix the price above the equilibrium, there will be excess supply over demand and there will be surplus.
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