Question

A number of states have a minimum wage that is higher than the federal minimum. In those states that impose such a minimum wage, it is more likely that the minimum wage acts as a binding:

Answer 1

Answer:

price floor, causing excess supply in the market.

Explanation:

A number of states have a minimum wage that is higher than the federal minimum. In those states that impose such a minimum wage, it is more likely that the minimum wage acts as a binding price floor, causing excess supply in the market.

A price refers to the amount of money a customer or consumer buying goods and services are willing to pay for the goods and services being offered. The price of goods and services are primarily being set by the seller or service provider.

Price control can be defined as standard restrictions or regulatory conditions that are typically set and enforced by the government of a country.

This ultimately implies that, price controls are used to impose the minimum and maximum prices set by the government, which are to be charged for various goods and services in the market. This minimum price that can be charged such as minimum wage is known as price floor while the maximum price that can be charged such as rent control is known as price ceiling.