If a government-imposed price floor legally sets the price of milk above market equilibrium, which of the following will most likely happen a. The quantity of milk demanded will increase. b. There will be a surplus of milk. c. There will be a shortage of milk. d. The quantity of milk supplied will decrease.

When a government imposes a price floor above the market equilibrium for milk, it essentially guarantees that sellers receive a minimum price for their product. This means that while producers are incentivized to supply more milk (as they can sell at a higher price), consumers may be discouraged from buying as much due to the elevated price. This imbalance commonly results in a surplus of milk, as producers produce more than consumers are willing to buy at that price point. In historical contexts, such as the agricultural policies in the U.S. during the 1930s, similar price floors were implemented to stabilize farmers' incomes. However, these measures often led to overproduction—think mountains of butter and cheese needing storage! The unintended consequences of trying to shield the market can result in excess supply, prompting government efforts to manage surpluses through subsidies or purchasing programs.