APFIVE Consequences of a Binding Price Floor
If the government imposes a price floor above the equilibrium price in a market for wheat, what is a possible long-term consequence?
A
A decrease in consumer surplus that eventually benefits producers.
B
The creation of black markets where wheat is sold below the equilibrium price.
C
Surplus of wheat that may result in wastage or storage costs.
D
The immediate elimination of deadweight loss due to efficient allocation.
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