Question

If a store sells a good at the market price, even though the government authorities have set the minimum price that can be charged, the store is selling the good in a(n): black market for a market price that is higher. black market for a market price that is lower. effort to eliminate a surplus of the good. legal market for a market price that is higher. legal market for a market price that is lower.

Answer 1

Answer:

The correct answer would be option D, Legal Market for a market price that is lower.

Explanation:

If there is a store which sells the goods at the market price even though the government authorities have set the minimum price that can be charged, it means store is selling the product at a price which is higher than the minimum price set by the government, but it doesn't mean that the store owner is doing any illegal trading. This is because the government has set the lower price limit but that ceiling price is non binding. It is not necessary for the market sellers to sell at the price given by government. So they are operating in a legal market for a market price that is lower.