A Price Floor Would Result in A(n)

question 27

Multiple Choice

A price floor would result in a(n)

• A)surplus.
• B)shortage.
• C)increase in equilibrium price.
• D)decrease in equilibrium price.
• E)shift of the demand curve to the right.

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Definitions:

Product Differentiation

The technique of setting a product or service apart from competitors to enhance its appeal to a distinct target audience.

Long-run Profits

Earnings achieved over an extended period, where all inputs can be adjusted by firms, reflecting the company's ability to adapt and reoptimize operations.

Perfectly Competitive

A market structure characterized by many buyers and sellers, homogeneous products, free entry and exit, and perfect information.

Efficient

The optimal allocation and utilization of resources to achieve the best possible outcome or output.