Podcast
Questions and Answers
Price floors are set above equilibrium prices to keep prices from going too low
Price floors are set above equilibrium prices to keep prices from going too low
True
Price floors are a form of government intervention in the market
Price floors are a form of government intervention in the market
True
Price floors create surpluses of goods in the market
Price floors create surpluses of goods in the market
True
Study Notes
Price Floors
- Price floors are set above the equilibrium price to prevent prices from falling below a certain level.
- They are a form of government intervention in the market, aimed at influencing the market outcome.
- As a result, price floors create a surplus of goods in the market, as producers are incentivized to supply more than what consumers are willing to buy.
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Description
Test your knowledge of price floors with this quiz! Learn about the purpose of price floors, their impact on market equilibrium, and how they create surpluses in the market. Explore how price floors are a form of government intervention in markets.
