A price floor exists when the price is set
A) below the equilibrium value.
B) too high.
C) at the equilibrium value.
D) above the equilibrium value.
E) too low.

Question

Quizplus · Accepted Answer

A price floor is a government-imposed regulation that sets a minimum price that can be charged for goods or services. This means that the price is set above the equilibrium value, which creates a surplus of goods, as the quantity supplied is greater than the quantity demanded at that price level.

A Price Floor Exists When the Price Is Set