Asked by Emily Huber on Jun 19, 2024
Verified
A binding price floor may not help all sellers, but it does not hurt any sellers.
Binding Price Floor
A price floor set above the equilibrium market price, causing a surplus by preventing the market price from falling to its equilibrium level.
Sellers
Individuals or entities that offer goods or services for sale to potential buyers.
- Comprehend the principle of price floors and their effect on market balance.
Verified Answer
GT
Grace Tiofanny SimanjuntakJun 21, 2024
Final Answer :
False
Explanation :
A binding price floor, set above the equilibrium price, can lead to a surplus where the quantity supplied exceeds the quantity demanded. This can hurt some sellers, especially those who cannot sell their goods due to reduced demand at the higher price.
Learning Objectives
- Comprehend the principle of price floors and their effect on market balance.