A Price Floor

question 20

Multiple Choice

A price floor

• A) always results in a surplus.
• B) always results in a shortage.
• C) results in a surplus if the floor price is higher than the equilibrium price.
• D) results in a shortage if the floor price is higher than the equilibrium price.

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Definitions:

Small Changes

Minor modifications or adjustments made to processes, products, or behaviors, often with the intention of improving efficiency, quality, or outcomes.

Company Profit

The financial surplus generated by a company after all operating expenses, including production costs, taxes, and overheads, have been deducted from total revenue.

Fare

A price paid for transportation.

Trade-ins

A sales transaction where a customer exchanges an old item as partial payment for a new one, common in the automotive and electronics industries.