If the government imposes a minimum price on a commodity<...
If the government imposes a minimum price on a commodity
Market surplus occurs
The market will be cleared in the short-run
Excess demand occurs
Government regulation is no longer needed
Correct answer is A
Minimum price is often called price floor and it is fixed by the government to protect the producer or seller. Minimum price is set above the equilibrium price and when this occur, there will be excess supply over demand i.e surplus.
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