A Price Floor Set Above a Market Equilibrium Price Causes

question 85

Multiple Choice

A price floor set above a market equilibrium price causes

• A)a surplus.
• B)a shortage.
• C)producers to receive lower prices.
• D)consumers to pay lower prices.

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Definitions:

Beer Bottling Facilities

Industrial setups where beer is prepared, bottled, and packaged for distribution and sale.

Equilibrium Price

The charge for which the desired quantity of a good or service is identical to the quantity that is supplied, resulting in a balanced market situation.

Inferior Good

An item whose demand falls when consumer income rises, contrasting with normal goods where demand increases with income.

Technological Advancement

The process of developing and applying new technologies to improve products, processes, or services.