Suppose the government decides to create a price support (floor)on the price of corn. A non-binding price support/floor below the equilibrium price in the market will also lead to a rise in the price of corn.

Question

Quizplus · Accepted Answer

A non-binding price support set below the equilibrium price does not affect the market because the market price is already higher than the support level, so the price of corn remains at the equilibrium level.

Suppose the Government Decides to Create a Price Support (Floor)on