If a price floor is set above the equilibrium price in a market rev: 05_07_2018 Multiple Choice the quantity demanded will exceed the quantity supplied. rationing will be unnecessary. shortages will develop. the quantity supplied will exceed the quantity demanded.

the quantity supplied will exceed the quantity demanded.

Explanation:

A price floor is when the government or an agency of the government sets the minimum price of a product. A price floor is binding if it is set above equilibrium price.

Because price is set above equilibrium price, quantity supplied would exceed quantity demanded and there would be a surplus.

If price were set below equilibrium price (the price floor is non-binding) there would be shortages as quantity demanded would exceed quantity supplied