Price Floor Quizlet

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Price floor quizlet.

The federal minimum wage at the. Start studying economics 4. Consequences of price floors. Learn price floor with free interactive flashcards.

Learn vocabulary terms and more with flashcards games and other study tools. Productive inefficiency the high price allows inefficient firms with high costs of production to stay in buisness. In this case there is no effect on anything and the equilibrium price and quantity stay the same. But this is a control or limit on how low a price can be charged for any commodity.

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. 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. Start studying econ quiz 6. Quantity supplied at the price floor exceeds the amount at the equilibrium price and quantity demanded is less than the amount at the equilibrium price.

Binding price floors encourage the formation of a black market. The price ceiling is below the equilibrium price. Learn vocabulary terms and more with flashcards games and other study tools. Like price ceiling price floor is also a measure of price control imposed by the government.

Learn vocabulary terms and more with flashcards games and other study tools. The result of a binding price floor is. Which of the following is an accurate statement about the consequence of a binding price floor. A government law that makes it illegal to charger lower than the specified price.

Final exam ch. Price floors and price ceilings. 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. Two things can happen when a price floor is implemented.