A price floor does not benefit producers.

Question

Quizplus · Accepted Answer

A price floor is a government regulation that sets a minimum price for a good or service. This means that producers cannot sell below this minimum price. Therefore, a price floor can benefit producers by ensuring that they receive a higher price for their product. However, if the minimum price is set above the equilibrium price (the price at which supply and demand are balanced), it can create a surplus of the product and decrease the quantity demanded, leading to a loss of revenue for producers. Therefore, a price floor's benefit to producers depends on how it is implemented.

A Price Floor Does Not Benefit Producers