Refer to Figure 4-17. Suppose a price floor of $7.00 is imposed. As a result,

A) buyers' total expenditure on the good decreases by $20.00.
B) the supply curve will shift to the left so as to now pass through the point (Q = 40, P = $7.00) .
C) the quantity of the good demanded decreases by 20 units.
D) the price of the good continues to serve as the rationing mechanism.

Price Floor

A legally imposed minimum price set above the equilibrium price, preventing the market price from falling below a certain level.

Demand Decreases

A situation where the quantity of a good or service that consumers are willing and able to purchase at a given price declines.

Expenditure

The action of spending funds or the amount of money spent on various items or services.