A binding price floor is a
A) minimum price, below equilibrium, which price is not allowed to fall below.
B) any minimum price which price is not allowed to fall below.
C) maximum price, below equilibrium, which price is not allowed to exceed .
D) minimum price, above equilibrium, which price is not allowed to fall below.
E) maximum price, above equilibrium, which price is not allowed to exceed.

Question

Quizplus · Accepted Answer

A binding price floor is set above the equilibrium price, preventing the price from falling to the equilibrium level, thus creating a surplus.

A Binding Price Floor Is a