One of the Problems Created by Price Floors Set Above

question 11

Multiple Choice

One of the problems created by price floors set above the equilibrium is:

• A) consumers complain about high prices.
• B) firms don't have incentives to reduce costs.
• C) the creation of surplus.
• D) how to cope with the shortages.
• E) the impact on firm profitability.

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Definitions:

R&D Activities

Research and Development activities involve investigative efforts companies undertake to innovate and introduce new products or services.

R&D Spending

Expenditures devoted to research and development in order to innovate, improve products, or discover new processes and technologies.

Rate of Return

A measure of the profitability of an investment, expressed as a percentage of the original investment.