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Figure: The Market for Spanish Textbooks
-(Figure: The Market for Spanish Textbooks) Look at the figure The Market for Spanish Textbooks. Suppose the government believes the producers of Spanish textbooks are not profitable and it wants to make sure textbook producers are profitable. It could impose a control called a _____, and for it to be binding, one possible price would be _____.
A) price floor; $90
B) price floor; $40
C) price ceiling; $40
D) price ceiling; $90

Question

Use the following to answer question:
Figure: The Market for Spanish Textbooks 
-(Figure: The Market for Spanish Textbooks) Look at the figure The Market for Spanish Textbooks. Suppose the government believes the producers of Spanish textbooks are not profitable and it wants to make sure textbook producers are profitable. It could impose a control called a _____, and for it to be binding, one possible price would be _____.
A) price floor; $90 
B) price floor; $40 
C) price ceiling; $40 
D) price ceiling; $90

Quizplus · Accepted Answer

A price floor is a minimum price set above the equilibrium price to ensure producers receive a higher price, making it binding at $90.

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