A Price Floor Policy Establishes a Minimum Price for a Market

question 17

Multiple Choice

A price floor policy establishes a minimum price for a market, and the policy is said to be binding if the market equilibrium price is less than the floor price. What impact does a binding price floor have on the market outcome?

• A) Excess supply
• B) Excess demand
• C) Shortage
• D) No impact, and the market price and quantity equal their equilibrium values

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the individual values in a dataset differ from the mean.

Lead Time

The time interval from the initiation of a process to its completion, often used in manufacturing and supply chain management to gauge efficiency.

Satisfactory Answers

Responses or solutions to questions or problems that meet the required standards or expectations without necessarily being the best possible.

P And Q Inventory Systems

P and Q Inventory Systems refer to inventory management strategies: P system (periodic review) and Q system (continuous review), aimed at maintaining optimal stock levels.