Asked by
Katelyn Richardson
on Oct 25, 2024
Verified
A price floor policy establishes a minimum price for a market. Which of the following results from a binding price floor?
A) Equilibrium
B) Excess demand
C) Excess supply
D) Shortage
Binding Price Floor
A minimum price set by the government above the equilibrium price, causing a surplus by preventing the market price from falling to its equilibrium level.
Excess Supply
A situation where the quantity of a good or service supplied is greater than the quantity demanded at a given price.
Equilibrium
A state where supply equals demand, allowing the market for a good or service to stabilize at a certain price and quantity.
- Comprehending the influence of enforceable and advisory price limitations on market consequences.
Verified Answer
CR
Learning Objectives
- Comprehending the influence of enforceable and advisory price limitations on market consequences.