Do all sellers benefit from a binding price floor?
A) No.A binding price floor benefits only some sellers because not all are able to sell as much as they would like in the legal market.
B) Yes.A binding price floor benefits all sellers because it allows all sellers to sell as much as they produce on the legal market.
C) No.A binding price floor does not benefit any sellers because sellers will be unwilling to sell any of their products.
D) No.A binding price floor benefits only some sellers because the price is initially higher but then eventually decreases to the equilibrium price.
E) No.A binding price floor does not benefit any buyers because buyers are unwilling to purchase any of the products at a price lower than the equilibrium.

Question

Quizplus · Accepted Answer

A binding price floor only benefits sellers who are able to sell their products at the higher price. However, sellers who are unable to sell their entire production at the higher price may not benefit at all. Furthermore, the higher price may lead to a surplus of the product, meaning that not all sellers will be able to sell their entire production at the higher price. Therefore, not all sellers benefit from a binding price floor.

Do All Sellers Benefit from a Binding Price Floor