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ddd [48]
3 years ago
12

A government-set price floor on a product rev: 05_07_2018 Multiple Choice will drive resources away from the production of the p

roduct. is intended to benefit the buyers of the product. will attract more resources towards the production of the product. does not interfere with the rationing function of price in a market system.
Business
1 answer:
Salsk061 [2.6K]3 years ago
6 0

Answer:

will attract more resources towards the production of the product

Explanation:

A price floor is when the government or an agency of the government sets the minimum price of a product. A price floor is binding if it is set above equilibrium price.

Because price is set above equilibrium price, quantity supplied would exceed quantity demanded and there would be a surplus.

If price were set below equilibrium price (the price floor is non-binding) there would be shortages as quantity demanded would exceed quantity supplied

price floor benefits sellers

Due to increased profitability as a result of the high price as a result of price floor, there would be a resource flow into that industry

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