Assertion (A): A price floor above equilibrium leads to a shortage.
Reason (R): Above equilibrium, quantity supplied exceeds quantity demanded.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer D

Correct answer: D

A is false: a floor above equilibrium causes a surplus.
R is true and describes that surplus.

Concept: Floor means surplus
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsPrice ceiling and price floor

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Ten questions from Market Equilibrium & Price Controls, at your own pace.

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Assertion (A): A price floor above equilibrium leads to a shortage.Reason (R): Above equilibrium, quantity supplied exceeds quantity demanded.

Explanation

Assertion (A): A price floor above equilibrium leads to a shortage.
Reason (R): Above equilibrium, quantity supplied exceeds quantity demanded.