Which of the following is an example of a price floor?
A) A minimum wage law.
B) An equilibrium price.
C) A law setting the highest price that can legally be charged for a litre of petrol.
D) A law passed in a city to lower apartment rents by setting the maximum price that can be charged for rent.
E) None of the above answers gives an example of a price floor.

Question

Quizplus · Accepted Answer

A minimum wage law is an example of a price floor, as it sets a minimum price (in this case, a wage) that must be paid for a certain good or service (in this case, labor). The other choices are not examples of a price floor. B refers to the point where supply and demand intersect, and C and D both refer to laws setting price ceilings rather than price floors.

Which of the Following Is an Example of a Price