Ask Question
BusinessBusiness
11 November, 08:28

Price floors

1. provide free-market incentives for producers

2 create surpluses by setting the price above equilibrium

3 create shortages by setting the price above equilibrium

4 are used by advocates of the free market

+5
Answers (1)
  1. 11 November, 08:59
    0
    2 create surpluses by setting the price above equilibrium

    Explanation:

    Price Floor is the minimum mandated price by the government. It is usually above the free equilibrium price level. It is intended to protect the sellers from under pricing in free markets.

    Eg - Minimum Support Price for farmer's agricultural products

    Since, supply is directly related & demand is inversely related to price. Price above the equilibrium level price creates : More Quantity Supplied & Less Quantity Demanded.

    Hence, this higher Supply > Demand creates surpluses of the commodity in the market.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Price floors 1. provide free-market incentives for producers 2 create surpluses by setting the price above equilibrium 3 create shortages ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Which of the following groups of employees is not covered by social security insurance? select one: a. self-employed persons b. clergy c. most military personnel d. railroad workers?
Answers (1)
An individual owns a bicycle repair business as a sole proprietorship. He does not make a lot of money, but he does have $5,000 available for investment this year.
Answers (1)
Which type of cover letter would the above excerpt come from? a. Prospecting cover letter b. Networking cover letter c. Application cover letter d. Follow up cover letter
Answers (1)
Roberta makes $9 an hour plus a 12.5% commission selling jewelry. how much does she earn on an 8 hour shift in which she sells $380 worth of jewelry?
Answers (1)
What is true about coumputer files of financial records
Answers (2)
New Questions in Business
A small number of institutional investors are often able and motivated to bring direct shareholder pressure on a firm's management in an effort to reduce potential agency conflicts. a. True b. False:
Answers (1)
True or false: increasing the confidence level will lead to a wider margin of error.
Answers (1)
Both Bond Sam and Bond Dave have 6 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has four years to maturity, whereas Bond Dave has 19 years to maturity. a.
Answers (1)
What role have public speeches served in ancient societies?
Answers (2)
What is the total annual value of goods and services produced in a country called? A. Gross Domestic Product B. Gross National Product C. Personal Disposable Income D. Gross National Income
Answers (1)
Home » Business » Price floors 1. provide free-market incentives for producers 2 create surpluses by setting the price above equilibrium 3 create shortages by setting the price above equilibrium 4 are used by advocates of the free market
Sign Up Forgot Password?