Question

[04.02 MC] A supply and demand graph, showing quantity on the x axis from 0 to 60 in 10 unit increments. Price is on yaxis from 0 to 5 in Public Domain The government sets the price of subsidized corn too low. Which of the following statements describes the result? (5 points) At that price, quantity demanded exceeds quantity supplied. At that price, quantity demanded equals quantity supplied. At that price, quantity demanded is lower than quantity supplied. At that price, quantity demanded and quantity supplied reach a price floor.

Answer 1

The statement that describes the result is At that price, quantity demanded exceeds quantity supplied. This is because the quantity of the demanded product from the consumer has higher range than the amount of supply from the market. This can results into shortage