The Presence of Price Floors in a Market Usually Is

question 72

Multiple Choice

The presence of price floors in a market usually is an indication that:

• A) there is an insufficient quantity of a good or service being produced.
• B) the forces of supply and demand are unable to establish an equilibrium price.
• C) sellers of the good or service outnumber the buyers.
• D) policymakers believe the price floor does not involve inequities.

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Definitions:

Imperfect Information

A situation where all parties in an economic transaction do not have equal access to relevant information.

Marginal Benefit

Marginal benefit is the additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service.

Marginal Cost

The growth in complete costs incurred by manufacturing an additional unit of a product or service.

Customer Satisfaction

The measure of how products or services meet or exceed customer expectations.