A Price Floor

question 200

Multiple Choice

A price floor

• A) is the highest price at which it is legal to trade a particular good, service, or factor of production.
• B) is the lowest price at which it is legal to trade a particular good, service, or factor of production.
• C) is an illegal price to charge.
• D) is the equilibrium price when the stock market crashes.
• E) is the lowest price for which the quantity demanded equals the quantity supplied.

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Definitions:

Government Licensing

The process by which a government authority grants permission to individuals or businesses to operate within a regulated profession or activity.

Patents

Legal documents granting inventors exclusive rights to their inventions for a certain period, preventing others from making, using, or selling the invention without permission.

Government Franchising

A method whereby the government grants a private entity the right to operate a public service or business within a certain territory or function.

Essential Resource

A resource considered vital for the survival of an economy or the operation of a business.