In Order to Be Binding,a Price Floor

question 122

Multiple Choice

In order to be binding,a price floor

• A)must lie above the free-market equilibrium price.
• B)must lie below the free-market equilibrium price.
• C)must coincide with the free-market equilibrium price.
• D)must be high enough for firms to earn a profit.

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Definitions:

Minimum Wage

The lowest hourly, daily, or monthly remuneration that employers are legally allowed to pay their workers.

Market-Clearing

Market-Clearing is the process by which market supply and demand are brought into balance at the equilibrium price, ensuring all goods produced are sold.

Price Control

Government-imposed restrictions on the maximum prices that can be charged for goods and services to control inflation or protect consumers.

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Educational books written in or translated into Spanish, specifically designed for learning the Spanish language or other subjects in Spanish-speaking regions.