A Price Floor Set Above the Equilibrium Price Causes a Surplus

question 82

True/False

A price floor set above the equilibrium price causes a surplus in the market.

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Definitions:

Average Fixed Costs

The constant production costs (unaffected by changes in output) divided by the production volume.

Swords

Swords are bladed weapons used historically and today for ceremonial, martial, or symbolic purposes, characterized by long blades for slashing or thrusting.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the quantity of output produced.

AFC

Average Fixed Cost, which is the fixed costs of production divided by the quantity of output produced; a measure of economies of scale.