A price floor is:
A) the lowest price a producer will accept.
B) the lowest price a consumer will pay.
C) a minimum price set by the government above equilibrium price.
D) a maximum price set by the government above equilibrium price
E) usually set equal to equilibrium price.

Question

Quizplus · Accepted Answer

A price floor is a minimum price set by the government above equilibrium price, usually to benefit producers or workers in a certain industry. This leads to a surplus of goods since the quantity supplied will exceed the quantity demanded at that price, and there will be leftover unsold goods.

A Price Floor Is