A price floor creates a situation in which one party wins and another party loses,and the gains for the winner are equal to the losses for the loser.

Question

Quizplus · Accepted Answer

A price floor, especially when set above the equilibrium price, can lead to excess supply and inefficiencies in the market. It does not guarantee that the gains for the winner are equal to the losses for the loser, as it can also lead to deadweight loss, affecting overall welfare negatively.

A Price Floor Creates a Situation in Which One Party