One of the Effects of a Price Floor (Set Above

question 56

Multiple Choice

One of the effects of a price floor (set above equilibrium price) is

• A) a surplus.
• B) higher-quality goods are produced.
• C) more satisfied customers.
• D) all of the above
• E) none of the above

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Definitions:

Theory of Economies of Scale

An economic concept that describes how as a firm increases its production scale, the average cost per unit of output decreases, leading to increased efficiency.

International Product Life Cycle

A theory explaining how a product matures and sales change over time on an international scale, impacting production and distribution.

Mercantilism

An economic theory that advocates for a country to export more than it imports to accumulate wealth.

Export Subsidies

Financial assistance grants provided by governments to domestic companies to encourage exports, making their products more competitively priced in the global market.