A Price Floor Is

question 158

Multiple Choice

A price floor is:

• A) a maximum price allowed by law.
• B) a minimum price allowed by law.
• C) able to produce an efficient outcome.
• D) a tool used to increase government revenues.

---

Definitions:

Fixed Cost

Costs that do not change with the level of output produced, such as rent or salaries.

Lawn-mowing

The process of cutting or trimming the grass in a yard or field to maintain a neat and uniform appearance.

Variable Costs

Expenses that change in proportion to the amount of goods or services produced, like labor and materials.

Profit-maximizing Output

The point of production where a company reaches its maximum profit, occurring when marginal cost matches marginal revenue.