Answer:
The new equilibrium quantity sold will be equal to twice the original equilibrium quantity sold minus the quantity supplied at the price floor. This is because the quantity supplied at the price floor is the surplus created by the price floor, and sellers will only be able to sell the original equilibrium quantity sold plus this surplus.
Step-by-step explanation:
If there is a price floor above the equilibrium price, it means that the government has set a minimum price that sellers cannot charge below. This will create a surplus in the market because the quantity supplied will be greater than the quantity demanded at the minimum price.
The new equilibrium quantity sold in this market will depend on the extent of the surplus created by the price floor. Specifically, the quantity sold will be equal to the quantity demanded minus the quantity supplied at the price floor.
Therefore, if Qd represents the quantity demanded, Qs represents the quantity supplied, and Qe represents the original equilibrium quantity sold, then the new equilibrium quantity sold in this market would be:
Qd - Qs = Qe - (Qs - Qe) = 2Qe - Qs
In other words, the new equilibrium quantity sold will be equal to twice the original equilibrium quantity sold minus the quantity supplied at the price floor. This is because the quantity supplied at the price floor is the surplus created by the price floor, and sellers will only be able to sell the original equilibrium quantity sold plus this surplus.