A Price Floor

question 22

Multiple Choice

A price floor

• A) changes the equilibrium price if it is imposed in black markets.
• B) changes the price and quantity if it is set below the equilibrium price.
• C) changes the price and quantity if it is set above the equilibrium price.
• D) does not create a black market if it is set above the equilibrium price.
• E) changes the price and quantity only if it equals the equilibrium price.

Explain the role of market power in determining the relationship between marginal revenue and demand curves.

Analyze the effects of regulation on natural monopolies, focusing on public ownership, pricing, and consumer welfare.

Distinguish between single-price monopoly and price discrimination practices.

Understand the conditions under which a monopoly can practice price discrimination and its impact on markets.

---

Definitions:

Educational Reform

Initiatives aimed at improving educational systems or practices, often focusing on issues such as quality, accessibility, and equality in schooling.

Texas

A state in the southern part of the United States, known for its significant cultural and historical contribution to the country.

Hurricane Katrina

A devastating Category 5 hurricane that struck the Gulf Coast of the United States in August 2005, causing widespread destruction, particularly in the city of New Orleans.

Compassionate Conservatism

A political philosophy that stresses using traditionally conservative techniques and concepts in order to improve the general welfare of society.