Price floors would create all of the following effects EXCEPT:

Name: Price floors would create all of the following effects EXCEPT:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Price floors set a minimum price above the market equilibrium price, creating a surplus and misallocation of resources. Deadweight loss occurs as producer and consumer surplus decrease due to reduced market activity. However, there is no direct relationship between price floors and decreases in product quality. Therefore, the correct answer is C.

Price Floors Would Create All of the Following Effects EXCEPT