When the government imposes a binding price floor, it causes which of the following to occur? a. the supply curve to shift to the left

When the government imposes a binding price floor, it causes which of the following to occur?
a. the supply curve to shift to the left
b. the demand curve to shift to the right
c. a shortage of the good to develop
d. a surplus of the good to develop

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Answer

• d. a surplus of the good to develop
  Explanation:
  A binding price floor is when the minimum price for goods is set above the market price or equilibrium price. When minimum price is set above the market clearing price, consumers will decrease their demand due to price increase, and suppliers will supply more of the good. Demand curve shifts to the left, and supply curve shifts to the right, which will cause a surplus of the good in the market because less quantity is being bought than supplied.