The government introduces a binding minimum price (price floor) of PminP_{\text{min}}Pmin on organic oats to support domestic farmers, as shown in the market diagram below:
What are the immediate economic consequences of this intervention on the market for organic oats?
An expansion of demand, a contraction of supply, and a market shortage of Qs−QdQ_s - Q_dQs−Qd.
A contraction of demand, a contraction of supply, and a market surplus of Qs−QdQ_s - Q_dQs−Qd.
A contraction of demand, an expansion of supply, and a market surplus of Qs−QdQ_s - Q_dQs−Qd.
An expansion of demand, an expansion of supply, and a market shortage of Qs−QdQ_s - Q_dQs−Qd.
