Question
20 thousand t-shirts Happy Economics Mentor That is correct! Tina At the price floor how many t-shirts is Bamboo Shoots willing and able to supply? Randall 60 thousand t-shirts Happy Economics Mentor That is correct! Tina So does the price floor create a shortage or a surplus of t-shirts? It creates a shortage. It creates a surplus. Submit
Answer
4
(218 Votes)
Vernon
Master · Tutor for 5 years
Answer
The question is asking whether a price floor creates a shortage or a surplus of t-shirts. Step 1: Understand the concept of price floor. A price floor is a minimum price set by the government for certain goods and services that it believes are being sold in an unfair market with too low of a price and thus their producers deserve some assistance.Step 2: Analyze the given information. The question states that at the price floor, 20 thousand t-shirts are demanded and 60 thousand t-shirts are supplied.Step 3: Compare the quantity demanded and the quantity supplied. If the quantity supplied is greater than the quantity demanded, it means there is a surplus. If the quantity demanded is greater than the quantity supplied, it means there is a shortage.In this case, the quantity supplied (60 thousand t-shirts) is greater than the quantity demanded (20 thousand t-shirts). So, the price floor creates a surplus of t-shirts. Final Answer: It creates a surplus.