Concept:A price floor is a minimum legal price set by the government. It is only effective when fixed above the equilibrium price.
Explanation:At a price floor above equilibrium, producers are encouraged to supply more of the commodity.
However, consumers are not willing to buy as much at that higher price.
This causes the quantity supplied to become greater than the quantity demanded.
The excess supply that results is called a surplus.
Thus, the price floor does not cause a shortage; it causes a surplus in the market.
Answer:A. Above the equilibrium and causes surpluses.