15
QuizMultiple Choice

The American Market Economy — Test

Question 15 • Economics

The government has set a price floor on bread. Manufacturers cannot sell loaves for less than 5 point 0 0 dollars , which is a dollar above the market price. What will most likely result from this price control?

Answer
A
The quantity demanded and quantity supplied for bread will increase.
B
The quantity demanded and quantity supplied for bread will decrease.
C
The quantity demanded for bread will increase,and the quantity supplied will decrease.
D
The quantity demanded for bread will decrease, and the quantity supplied will increase.

Explanation

The $5.00 price floor is above the market price, so it raises the price of bread. At a higher price, consumers demand fewer loaves, while manufacturers are willing to supply more. Therefore, quantity demanded decreases and quantity supplied increases, which matches choice D.

AI-written and checked against the verified answer.

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