Price floors are intended to help certain people but they have side effects that may harm others in predictable ways.
Quizlet price floor.
It is legal minimum price set by the government on particular goods and services in order to prevent producers from being paid very less price.
Perhaps the best known example of a price floor is the minimum wage which is based on the normative view that someone working full time ought to be able to afford a basic standard of living.
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Consequences of price floors.
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Like price ceiling price floor is also a measure of price control imposed by the government.
They don t face incentives to cut costs by using more efficient production methods because the high price offers them protection from lower cost competitors.
The federal minimum wage at the.
Binding price floors encourage the formation of a black market.
Price floors are used by the government to prevent prices from being too low.
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If a price floor is imposed at 15 per unit when the equilibrium market price is 12 there will be.
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Final exam ch.
Which of the following is an accurate statement about the consequence of a binding price floor.
A price floor is the lowest legal price that can be paid in markets for goods and services labor or financial capital.
The most common price floor is the minimum wage the minimum price that can be payed for labor.
Productive inefficiency the high price allows inefficient firms with high costs of production to stay in buisness.
Price floors are also used often in agriculture to try to protect farmers.
A price floor is the lowest legal price a commodity can be sold at.
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Which of the following is a likely result of a price floor imposed on providers of a particular service.
