A binding price floor will result in ________.

Name: A binding price floor will result in ________.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A binding price floor, set above the equilibrium price, leads to a surplus of goods, as the quantity supplied exceeds the quantity demanded. This results in inefficiencies in the market, or deadweight loss, except in the rare cases where demand or supply is perfectly inelastic, meaning quantity demanded or supplied does not change regardless of price changes.

A Binding Price Floor Will Result in ________