(Figure: Determining Surplus and Loss) In the graph, which price would NOT allow for a binding price floor?

Name: (Figure: Determining Surplus and Loss) In the graph, which price would NOT allow for a binding price floor?
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Question

Quizplus · Accepted Answer

A price of $6 would not allow for a binding price floor because it is below the equilibrium price of $10. A price floor can only be binding if it is set above the equilibrium price, otherwise it has no effect.

(Figure: Determining Surplus and Loss) in the Graph, Which Price