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Faith Ngibuini
on Oct 26, 2024

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An effective price floor will lead to:

A) quantity demanded being greater than quantity supplied.
B) an excess supply or a surplus.
C) the need for government to produce more of the good.
D) suppliers determining the amount of the good bought and sold in the market.

Price Floor

A government or regulatory minimum price set on goods and services, typically above the equilibrium price, to prevent prices from falling too low.

Excess Supply

A market situation where the quantity of a good or service offered for sale by producers exceeds the quantity demanded by consumers at the current price.

Quantity Demanded

The total amount of goods or services that consumers are willing and able to purchase at a given price point.

  • Understand the impact of price controls, including ceilings and floors, on the equilibrium of the market.
  • Investigate the effects of quotas and price controls (ceilings and floors) on the occurrence of surplus, insufficiency, and the disruption of market efficiency.
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Chase WickmanOct 28, 2024
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