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Figure: Understanding Price Ceilings and Floors
-(Figure: Understanding Price Ceilings and Floors)In the graph,which price would allow for an effective price floor?

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Figure: Understanding Price Ceilings and Floors 
-(Figure: Understanding Price Ceilings and Floors)In the graph,which price would allow for an effective price floor?

Quizplus · Accepted Answer

An effective price floor is a price set above the equilibrium price, so it must be higher than the point where the supply and demand curves intersect. In this graph, the equilibrium price is $50, so any price above that would be an effective price floor. The only option higher than $50 is option C, $75. Therefore, option C is the correct answer.

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