A Binding Price Floor Will Reduce a Firm's Total Revenue

question 58

Multiple Choice

A binding price floor will reduce a firm's total revenue

• A)always.
• B)when demand is elastic.
• C)when demand is inelastic.
• D)never.

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Definitions:

Entry Barriers

Obstacles that prevent new competitors from easily entering an industry or area of business.

Four-Firm Concentration Ratio

A metric that represents the market share of the four largest firms in an industry as a percentage of the total industry's output.

Restaurant Industry

A sector of the economy comprising establishments primarily engaged in preparing and serving meals, snacks, and beverages for immediate consumption.

Metropolitan Area

A region consisting of a densely populated urban core and its less-populated surrounding territories, sharing industry, infrastructure, and housing.