Answer to Question #282819 in Microeconomics for Mahfuza

Question

. The soccer board persuaded government to impose a price floor of $40 per ticket of soccer game

which is above the equilibrium price of $35. As a result of this policy, do more or fewer people will

attend soccer game and what problem may arise? Briefly discuss with a graph.

Answer 1

As a result of the policy, fewer people will attend the soccer game.

This is because the imposition of a price floor will result in excess supply due to quantity supplied exceeding quantity demanded.

This is illustrated in the graph below: