Problemas
The market equilibrium price for sugar is 0.06 cents a pound, and the market equilibrium quantity Is 30 million pounds.Which of the following policies would create an excess supply of sugar? A price floor of 10 cents a pound A price celling of 3 cents a pound A price floor of 3 cents a pound A price celling of 10 cents a pound
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To determine which policy would create an excess supply of sugar, we need to understand the effects of price floors and price ceilings on the market equilibrium.- A price floor is a minimum price set by the government above the equilibrium price, which can lead to excess supply because producers are willing to supply more at the higher price than consumers are willing to buy.- A price ceiling is a maximum price set by the government below the equilibrium price, which can lead to excess demand because consumers want to buy more at the lower price than producers are willing to supply.Given the market equilibrium price of $0.06 (or 6 cents) per pound and the equilibrium quantity of 30 million pounds, let's analyze the options:1. **A price floor of 10 cents a pound**: This is significantly higher than the equilibrium price, which would cause producers to supply much more sugar than consumers are willing to buy, resulting in excess supply.2. **A price ceiling of 3 cents a pound**: This is lower than the equilibrium price, which would cause consumers to demand more sugar than producers are willing to supply, resulting in excess demand, not excess supply.3. **A price floor of 3 cents a pound**: This is slightly above the equilibrium price, but not significantly. It might cause a small excess supply, but not a significant one.4. **A price ceiling of 10 cents a pound**: This is higher than the equilibrium price, which would not cause excess supply; instead, it would lead to excess demand because consumers would want to buy more at the higher price than producers are willing to supply.Therefore, the policy that would create an excess supply of sugar is:**A price floor of 10 cents a pound**.