Consider a Market for Fish Whose Market Demand and Market

Multiple Choice

Consider a market for fish whose market demand and market supply for fish are specified as Qd = 300 − 2.5P and Qs = − 20 + 1.5P, respectively. The government decides to impose a price floor of $50 per ton. What would be the resulting market distortion?

A) Shortage of 120 tons of fish
B) Shortage of 175 tons of fish
C) Surplus of 120 tons of fish
D) There would be no market distortion