Productive inefficiency the high price allows inefficient firms with high costs of production to stay in buisness.
Quizlet price floor.
A price floor is the lowest legal price that can be paid in markets for goods and services labor or financial capital.
Price floors are also used often in agriculture to try to protect farmers.
Consequences of price floors.
Which of the following is a likely result of a price floor imposed on providers of a particular service.
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.
Binding price floors encourage the formation of a black market.
Price floors are used by the government to prevent prices from being too low.
Price floors and price ceilings.
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Which of the following is an accurate statement about the consequence of a binding price floor.
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The federal minimum wage at the.
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.
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.
If a price floor is imposed at 15 per unit when the equilibrium market price is 12 there will be.
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The most common price floor is the minimum wage the minimum price that can be payed for labor.
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But this is a control or limit on how low a price can be charged for any commodity.
A price floor is the lowest legal price a commodity can be sold at.
