If a Non-Binding Price Floor Were to Be Set in the Market

question 135

Multiple Choice

If a non-binding price floor were to be set in the market in the graph shown,it could be set at:

• A) $30.
• B) $23.
• C) $16.
• D) All of these would be binding price floors for this market.

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Definitions:

Unfair Competition

Business practices that are deemed unethical or illegal, aiming to gain an unfair market advantage.

Oligopolist

An oligopolist is a participant within an oligopoly, which is a market structure characterized by a small number of firms dominating the industry, often leading to limited competition and higher prices for consumers.

Profit

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Long Run

A period of time in economics during which all factors of production and costs are variable, and all adjustments can be made within the economy.