A price floor would be established in cases where the government believed the market equilibrium price would:
A) result in a surplus.
B) be too high.
C) result in a shortage.
D) be too low.
E) yield excess profits.

Question

Quizplus · Accepted Answer

A price floor is set above the market equilibrium price for goods and services. This is done to ensure that producers are paid a fair price for their goods and services. If the government believes that the market equilibrium price would be too low (resulting in producers receiving too little), they would establish a price floor.

A Price Floor Would Be Established in Cases Where the Government