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

Analyze the question: Minimum price legislation (a price floor) sets a legal minimum price above the equilibrium price. We need the option that is NOT a consequence or feature of it.

Concept: When the government fixes a price above equilibrium (e.g., minimum wage, or guaranteed minimum prices for farm produce):

• Quantity supplied rises, while quantity demanded falls.
• This creates excess supply (surplus), not excess demand.
• The market cannot reach equilibrium because the law prevents the price from falling, so equilibrium is unattainable.
• Surplus goods may be sold illegally below the legal minimum, creating a black market.
• In the labour market, a minimum wage above equilibrium means more people want jobs than employers will hire, which causes unemployment.

Checking each option:

• A. Black market: associated (illegal selling below the floor price).
• B. Excess demand: not associated. It occurs with maximum price legislation (price ceiling), where the price is set below equilibrium.
• C. Excess supply: associated (the main result of a price floor).
• D. Unattainable equilibrium: associated (the legal floor blocks the market from adjusting).
• E. Unemployment: associated (the minimum wage example).

Answer: B. Excess demand, which belongs to maximum price legislation, not minimum price legislation.

Exam tip: Remember "Floor = Flood of supply" (surplus), and "Ceiling = Crowd of buyers" (shortage or excess demand). A minimum price gives excess supply, and a maximum price gives excess demand.