A Binding Price Floor Is a

question 24

Multiple Choice

A binding price floor is a

• A)minimum price,below equilibrium,below which price is not allowed to fall.
• B)maximum price,above equilibrium,which price is not allowed to exceed.
• C)minimum price,above equilibrium,below which price is not allowed to fall.
• D)maximum price,below equilibrium,which price is not allowed to exceed.
• E)any minimum price below which price is not allowed to fall.

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Definitions:

Economies of Scale

The cost advantage that arises with increased output of a product, resulting in a decrease in the per-unit cost as the scale of production is enlarged.

Long-run Total Costs

The aggregate sum of all production costs for a company when all input factors are variable, analyzed over a prolonged period.

Economies of Scale

The cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale.

Average-total-cost Curve

A graphical representation that shows the average total cost of producing each quantity of output.