Price floors are designed to
A)establish a minimum allowable price.
B)allow free market prices to be achieved.
C)create shortages where none existed before.
D)none of the above.

Question

Quizplus · Accepted Answer

Price floors are designed to establish a minimum allowable price. This is done to ensure that producers receive a certain level of income and to prevent prices from falling too low. However, price floors can also lead to surpluses and inefficiencies in the market.

Price Floors Are Designed to