A Price Floor That Is Binding

question 11

Multiple Choice

A price floor that is binding:

• A) must be set above the equilibrium price, and will likely cause a shortage.
• B) must be set below the equilibrium price, and will likely cause a shortage.
• C) must be set above the equilibrium price, and will likely cause a surplus.
• D) must be set below the equilibrium price, and will likely cause a surplus.

---

Definitions:

Venture Capital

Financing that investors provide to startup companies and small businesses with long-term growth potential in exchange for an equity stake.

First Stage Investment

The initial round of funding for a startup or business venture, typically provided by venture capitalists or angel investors to support early development.

Rate of Return

A measure of the gain or loss on an investment over a specified period, expressed as a percentage of the investment's cost.

Strategic Circumference

The boundary or scope within which strategic decisions and actions take place, defining the extent of an organization's strategic domain.