To affect the market outcome,a price floor

Question

Quizplus · Accepted Answer

A price floor is a government intervention in which the minimum price that can be charged for a good or service is set at a level above the equilibrium price. This means that the price is set higher than what the market would naturally bear without government intervention. Setting a price floor above the equilibrium price will create a surplus of the good or service because suppliers will produce more than what consumers are willing to buy at that higher price. Therefore, the best choice is option D, which states that the price floor must be set above the equilibrium price.

To Affect the Market Outcome,a Price Floor