A price floor is:
A) the lowest price a producer will accept.
B) the lowest price a consumer will pay.
C) a minimum price set by the government above equilibrium price.
D) a maximum price set by the government above equilibrium price

Question

Quizplus · Accepted Answer

A price floor is a government-imposed minimum price that is set above the equilibrium price. This is done in order to protect producers by ensuring that they receive a higher price for their goods or services. If the price floor is set too high, however, it can lead to a surplus of the product as consumers are no longer willing to pay the higher price, which can lead to inefficiencies in the market.

A Price Floor Is