If the government sets a minimum price at which a good or service can be sold, it thereby creates
A)a price ceiling.
B)a black market price.
C)a price floor.
D)an illegal price control.

Question

Quizplus · Accepted Answer

When the government sets a minimum price at which a good or service can be sold, it creates a price floor. This means that the price cannot fall below this minimum level, even if supply exceeds demand. This can lead to a surplus of the good, and may also lead to decreased demand as consumers are less willing to pay the higher price.

If the Government Sets a Minimum Price at Which a Good