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In a perfectly competitive market with no externalities, which of the following is TRUE regarding the impact of price floors?

A

A price floor set above the market equilibrium price will create a surplus in the market.

B

A price floor set above the market equilibrium price will create a shortage in the market.

C

A price floor set below the market equilibrium price will create a surplus in the market.

D

A price floor set below the market equilibrium price will create a shortage in the market.

E

A price floor set above the market equilibrium price will have no impact on the market.

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