Why does a price floor lead to surpluses? Why does a price ceiling lead to shortages?

Business

1 answer:

Degger [83]3 years ago

7 0

Answer:

Shortage: there is more demand than there is at the equilibrium price. There is also less supply than there is at the equilibrium price, thus there is more quantity demanded than quantity supplied.

Your pretty much short in supply and cant fulfill the demand

While surplus

When a price floor is set above the equilibrium price, quantity supplied will exceed quantity demanded, and excess supply or surpluses will result.

Theirs a a large amount of supply due to the pricing most likely beign high

Explanation:

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Why does a price floor lead to surpluses? Why does a price ceiling lead to shortages? ​

Why does a price floor lead to surpluses? Why does a price ceiling lead to shortages?