Figure 6-4

Graph (a)

Graph (b)

Refer to Figure 6-4. In graph (b), there will be

Question

Figure 6-4

Graph (a)

Graph (b)

​

Refer to Figure 6-4. In graph (b), there will be

BlackTom AI · Accepted Answer

To approach this question, I will evaluate each option in the context of Graph (b) in Figure 6-4.
Option 1: a surplus. In Graph (b), the price floor is set above the market-clearing price, which creates a situation where the quantity supplied exceeds the quantity demanded. This mismatch results in excess supply, i.e., a surplus, rather than a balanced market.
Option 2: lines of people waiting to buy the good. This outcome corresponds to a shortage, which would occur if the price floor were below the equilibrium price or if there were a binding price ceiling causing unmet demand. Since Graph (b) shows a price floor above equilibrium, this is not what happens.
Option 3: a shortage. A shortage occurs when the demand exceeds supply, typically under a binding price ceiling or if the price floor is set below equilibrium. In this graph, the price floor causes the opposite effect, so this option is incorrect.
Option 4: equilibrium in the market. Equilibrium means the quantity supplied equals quantity demanded. A price floor above equilibrium disrupts this balance, producing surplus, not equilibrium. Therefore, this option does not describe the situation in Graph (b).
Thus, after examining all choices, the correct characterization for Graph (b) is that there will be a surplus. The graph illustrates the classic outcome of a price floor above the equilibrium price, where suppliers are willing to offer more of the good than buyers are willing to purchase at that price.

Figure 6-4 Graph (a) Graph (b) Refer to Figure 6-4. In graph (b), there will be

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Figure 6-4 Graph (a) Graph (b) ​ ​ Refer to Figure 6-4. In graph (b), there will be

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Figure 6-4 Graph (a) Graph (b) Refer to Figure 6-4. In graph (b), there will be