A Nonbinding Price Floor Has Which of the Following Consequences

question 145

Multiple Choice

A nonbinding price floor has which of the following consequences?

• A) There will be downward pressure on prices until quantity demanded equals quantity supplied.
• B) There will be upward pressure on prices until quantity demanded equals quantity supplied.
• C) There are no consequences to a nonbinding price floor.
• D) The quantity demanded will always exceed the quantity supplied.
• E) The quantity demanded will always be smaller than the quantity supplied.

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Definitions:

Tangible Product

Physical items that can be seen, touched, and owned, as opposed to services or digital goods.

Unlimited Demand

A theoretical concept where the desire for a product or service exceeds any constraints, such as availability or price, leading to infinite demand.