A Price Floor That Sets the Price of a Good

question 117

Multiple Choice

A price floor that sets the price of a good above market equilibrium will cause

• A) a decrease in quantity demanded of the good.
• B) an increase in quantity supplied of the good.
• C) a surplus of the good.
• D) all of the above.

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Definitions:

Purchases Discount

Purchases Discount refers to a reduction in the price paid for goods or services if payment is made within a specified period.

Yearly Savings Rate

The percentage of one's income that is saved annually, often used in personal financial planning.

FOB Shipping Point

A term used in shipping contracts to indicate that a buyer must pay for the shipping costs and is responsible for the goods once they leave the seller's premises.

FOB Destination

FOB Destination is a shipping term indicating that the seller retains ownership and liability of goods until they are delivered to the buyer's specified location, at which point the buyer assumes responsibility.