Asked by Breanna Clayton on Jul 08, 2024
Verified
Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.
Binding Price Floors
Binding price floors are minimum prices set by the government for certain goods or services that are above the equilibrium price, leading to surpluses.
Sellers
Persons or organizations that provide products or services to buyers or other commercial entities.
- Understand the concept of price floors and their impact on market equilibrium.
Verified Answer
CB
Christiane BlessmannJul 14, 2024
Final Answer :
False
Explanation :
Binding price floors can lead to surpluses because the minimum price is set above the equilibrium price, causing the quantity supplied to exceed the quantity demanded, which means sellers may not be able to sell all they want.
Learning Objectives
- Understand the concept of price floors and their impact on market equilibrium.