Price Floor Examples Answers

A price floor is government imposed limit on how low a price can be charged for a product or service.

Price floor examples answers.

A price floor is a minimum price enforced in a market by a government or self imposed by a group. Alot of the examples of price floors seem to be related to weeding out unhealthy life styles but i can t think or find examples of elasticity in action. An example of a price floor in the us are minimum wage laws. The minimum wage b.

Restricting petrol prices to rs100 per litre when the equilibrium price is rs150 per litre d. A price gouging law d. All of these answers are price floors related mcqs because supply and demand conditions for primary products are very price inelastic their prices which side of the market is more likely. Price floor is a price control policy that indicates the lowest price an item or a service can be sold in the market.

An example of a price floor albiet not a good one. For example i read an article about how the russia wanted to emplace a price floor to reduce alcohol intake and how it had placed a price floor to get rid of the fake alcohol in the market. Wiki user answered. It tends to create a market surplus because the quantity supplied at the price floor is higher than the quantity demanded.

A black market price e. Is a real life example of a price floor. Which leads to a surplus. This law introduced a ceiling wage of 3 in 1925 but it was later abolished in 1968.

Similarly a typical supply curve is. The government has set the. A minimum wage law b. Step by step answers are written by subject experts who are available 24 7.

Want to see this answer and more. None of the above. Finally price ceilings imposed on food by the government of venezuela led to shortages and hoarding in 2008. Demand curve is generally downward sloping which means that the quantity demanded increase when the price decreases and vice versa.

For a price floor to be effective it should be higher than its equilibrium price. Another example of a price ceiling involved the coulter law regarding the vfl in australia. An effective price floor must be set above equilibrium resulting in. Which leads to a shortage.

Check out a sample q a here.