When a Binding Price Floor Is Imposed on a Market

question 283

Multiple Choice

When a binding price floor is imposed on a market to benefit sellers,

• A) every seller in the market benefits.
• B) every buyer in the market benefits,too.
• C) every seller who wants to sell the good will be able to do so,but only if they appeal to the personal biases of the buyers.
• D) some sellers will not be able to sell any amount of the good.

---

Definitions:

Savings Account

A deposit account held at a bank or financial institution that provides principal security and a modest interest rate.

Interest Rate

The percentage of a sum of money charged for its use, often expressed annually.

Economic Profits

The surplus gained by a firm when total revenue exceeds total costs, including both explicit and implicit costs, reflecting the financial advantage of a particular course of action.

Accounting Profits

The total revenue of a business minus explicit costs; also known as net income.