Which side of the market is more likely to lobby government for a price floor ?
Correct answer: C. the sellers
- A. the buyers
- B. Neither buyers nor sellers desire a price floor.
- C. the sellers
- D. Both buyers and sellers desire a price floor.
Explanation
Sellers generally favour price floors because a binding floor keeps the market price above equilibrium and can raise the price they receive. Buyers oppose them because they must pay more and may purchase less.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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