Market demand is given as Q_D= 280 - 4P.Market supply is given as Q_S= 2P + 40.Which legally imposed price would constitute a binding price floor

Name: Market demand is given as Q D = 280 - 4P.Market supply is given as Q S = 2P + 40.Which legally imposed price would constitute a binding price floor
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Question

Quizplus · Accepted Answer

A binding price floor is set above the equilibrium price. The equilibrium price is found by setting QD = QS, which gives P = 40. Therefore, a price floor above $40, such as $50, would be binding.

Market Demand Is Given as QD = 280 - 4P

Market Demand Is Given as Q_D= 280 - 4P