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A Price Floor Is Likely to Cause Deadweight Loss Because

Question 104

Essay

A price floor is likely to cause deadweight loss because:
A.buyers incur additional search costs looking for the scarce good.
B.the quantity of the good being bought and sold is less than the equilibrium quantity.
C.a black market emerges and sellers sell the good at prices above the price floor.
D.some buyers who want to buy at the controlled price are unable to find a seller willing to sell at that price.

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the quantity of the ...

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