A Price Floor Is a Price

question 300

Multiple Choice

A price floor is a price

• A) below which a seller cannot legally sell.
• B) above which a seller cannot legally sell.
• C) that creates a surplus of the good if it is set above the equilibrium price.
• D) Both answers A and C are correct.

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Definitions:

Contract Negotiating Procedures

The systematic steps and methods used during the process of reaching an agreement on contractual terms.

Auction With Reserve

A type of auction in which the seller reserves the right to accept or reject the highest bid.

Auction Without Reserve

An auction in which the item for sale will be sold regardless of the price, as there is no minimum bid or reserve price.

Open Price Term

In a contract, a provision that allows the price to be determined later based on agreed criteria or market conditions.