Price Floor Set Below Equilibrium. The equilibrium price will be maintained. The graph below represents the market for strawberries.
In this case the shortage is equal to 38001300 or 2500 gallons of milk. Drawing a price floor is simple. Yet if the price floor was set at 500 below the equilibrium it would have no effect.
At the price P the consumers demand for the commodity equals the producers supply of the commodity.
In such situations the quantity supplied of a good will exceed the quantity demanded resulting in a surplus. The equilibrium market price is P and the equilibrium market quantity is Q. Price floors prevent a price from falling below a certain level. The graph below represents the market for strawberries.
