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Suppose the price of wheat is set at $5 a bushel and not allowed to decrease. This price is above the equilibrium price, which causes a surplus of wheat in the marketplace. This situation describes a _____.


price floor

price ceiling

Verified Answer :

macm155

Answer: it is price floor

Explanation:

5$ is the lowest the price can go because they will NOT set it any lower, but it can go higher from there.

i took the testtoo, i got it correct.

floor is the lowest price, ceiling is the highest.

agustinsr99

Answer: Suppose the price of wheat is set at $5 a bushel and not allowed to decrease. This price is above the equilibrium price, which causes a surplus of wheat in the marketplace. This situation describes a PRICE FLOOR.

Explanation: Price floor: Government practice consisting in setting a price above the market price; It tends to benefit producers. For this measure to be effective, means must be administered to absorb surplus production.

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