A price floor that is set below the equilibrium price
A)causes suppliers to lower their prices.
B)is binding.
C)is non-binding.
D)creates a shortage.

Name: A price floor that is set below the equilibrium price A)causes suppliers to lower their prices. B)is binding. C)is non-binding. D)creates a shortage.
Brand: Quizplus
Rating: 4.7 (37 reviews)

Question

Quizplus · Accepted Answer

A price floor set below the equilibrium price is non-binding because it does not affect the market. The market will naturally settle at the equilibrium price, and the price floor will have no impact.

A Price Floor That Is Set Below the Equilibrium Price