Asked by Patricia Callison on May 10, 2024
Verified
A minimum price, set by the government, that sellers may charge for a good is known as
A) a price floor.
B) a price rationing mechanism.
C) a price ceiling.
D) a subsidy.
Price Floor
A government- or authority-imposed minimum price that can be charged for a good or service, intended to prevent the market price from falling below a certain level.
Government
The system or group of people governing an organized community, often a state.
Sellers
Individuals or entities that offer goods or services in exchange for payment.
- Understand the concept of price ceilings and price floors in market regulation.
Verified Answer
EJ
Eric J. SpiewakMay 11, 2024
Final Answer :
A
Explanation :
A price floor is a government-imposed limit on how low a price can be charged for a product, ensuring that the price does not fall below a certain minimum level. This is often used to protect producers or farmers from prices that are too low to cover their costs.
Learning Objectives
- Understand the concept of price ceilings and price floors in market regulation.