The government has set a price floor on bread. Manufacturers cannot sell loaves for less than $5.00, which is a dollar above the market price. What will most likely result from this price control?

The $5.00 price floor is above the market price, so it is binding and raises the price of bread. At a higher price, consumers will demand fewer loaves, while manufacturers will be willing to supply more. Thus, quantity demanded decreases and quantity supplied increases, as choice A states.

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