Asked by
Rafiq tejani
on Dec 11, 2024
Verified
A price floor that sets the price of a good above market equilibrium will cause
A) a decrease in quantity demanded of the good.
B) an increase in quantity supplied of the good.
C) a surplus of the good.
D) all of the above.
Price Floor
A government or group-imposed price control that sets the minimum allowed price for a particular good or service, intended to ensure fair conditions for producers.
Market Equilibrium
The state in which market supply and demand balance each other, and as a result, prices become stable.
Surplus
Surplus is a condition where the quantity supplied of a product exceeds the quantity demanded at a specific price, often leading to decreases in price.
- Acquire knowledge on how market equilibrium is impacted by the implementation of price floors and ceilings, creating surpluses or shortages.
- Investigate how modifications in the prices of inputs, including labor and raw materials, affect the marketplace for finished goods.
Verified Answer
DS
Learning Objectives
- Acquire knowledge on how market equilibrium is impacted by the implementation of price floors and ceilings, creating surpluses or shortages.
- Investigate how modifications in the prices of inputs, including labor and raw materials, affect the marketplace for finished goods.