Which of the following is NOT associated with minimum price legislation?

Analyze the question: We need the option that is NOT a result of minimum price legislation (a price floor).

Concept: Minimum price legislation is when the government sets a price above the equilibrium price, so sellers cannot be forced to sell below it. Examples are guaranteed minimum prices for agricultural produce and minimum wage laws (the minimum price of labour).

Effects of a price floor set above equilibrium:

• At the higher price, quantity supplied rises and quantity demanded falls.
• This creates a surplus (excess supply). This is option B, so it is associated.
• The surplus may go unsold, be stored and spoil, or be bought up by the government. This is wastage of resources, so option A is associated.
• In the labour market, a minimum wage above equilibrium means more people want jobs than employers will hire, which leads to unemployment. Option D is associated.
• Excess demand (shortage) happens when the price is held below equilibrium. That is maximum price legislation (price ceiling), such as rent control. It is not associated with a minimum price.

Step-by-step:

1. Minimum price is above equilibrium, so Qs > Qd, which means excess supply.
2. Excess supply leads to wastage, and in the labour market to unemployment.
3. Excess demand belongs to price ceilings, so it is the odd one out.

Answer: Option C, excess demand.

Tip: Remember "Floor = Frustrated buyers, Surplus" and "Ceiling = Shortage." A minimum price (floor) gives a surplus. A maximum price (ceiling) gives a shortage or excess demand.