Question

A binding price floor causes
A) Excess demand for the goods B) Surplus supply of goods C) Less supply of goods D) No demand for the goods

Answer 1

Answer:

A binding price floor occurs when the government sets a required price on a good or goods at a price above equilibrium. Because the government requires that prices not drop below this price, that price binds the market for that good. This results in unsold goods, creating a surplus in that good

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Explanation: