To Be Effective, a Price Floor Must Be

question 269

Multiple Choice

To be effective, a price floor must be

• A)above the equilibrium price.
• B)at the equilibrium price.
• C)below the equilibrium price.
• D)anywhere on the graph.

---

Definitions:

Segment Margin

The amount of profit or loss generated by a specific segment of a business, after accounting for the direct costs and expenses attributable to that segment.

Traceable Fixed Expenses

Costs that are consistently the same in total but can be directly linked to a specific department, project, or product.

Net Operating Income

A profitability measure that calculates a company's income after operating expenses are subtracted but before deducting interest and taxes.

Break-even Sales

The amount of revenue needed to cover total costs, both fixed and variable, at which point a business neither makes a profit nor incurs a loss.