A Price Floor That Is Set Above the Equilibrium Price

question 106

Multiple Choice

A price floor that is set above the equilibrium price

• A)causes suppliers to lose money.
• B)creates a shortage.
• C)is non-binding.
• D)creates a surplus.

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Definitions:

Price Discriminating

It involves charging different prices for the same product or service to different consumers, based on the willingness to pay, often to maximize sales and profits.

Pure Monopolist

A single seller in a market that produces a unique product without close substitutes, controlling the market price.

Marginal Cost

The cost incurred by producing one additional unit of a product or service.

Price Discrimination

A strategy in pricing where the same provider sells goods or services that are identical or nearly identical at varying prices in distinct markets.