The Likely Result of a Binding Price Floor Is a _____

question 3

Multiple Choice

The likely result of a binding price floor is a _____ of the good at a price _____ the equilibrium price.

• A)surplus;above
• B)shortage;below
• C)surplus;below
• D)shortage;above

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business such as costs for raw material which increase as production increases.

After-Tax Salvage

The net value gained from selling an asset after accounting for taxes on the sale.

Marginal Tax Rate

The tax rate applicable to the last dollar of the taxpayer's income, influencing financial decision-making and planning.