What Condition Is Necessary for a Price Floor to Have

question 16

Essay

What condition is necessary for a price floor to have an impact on a market? Describe two effects that a price floor can have on a market.

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Definitions:

Restaurant Chain

A series of restaurants owned by the same company or individual, offering the same or similar food and experiences across locations.

Price To Earnings Ratio

The ratio for valuing a company that measures its current share price relative to its per-share earnings.

Stock

A type of security representing ownership in a corporation and a claim on part of the corporation's assets and earnings.

Term

In finance, it refers to the length of time until a loan's maturity. In general, it can mean a period or condition stipulated in an agreement.