Is a price established by the government above the equilibrium market price?

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1223597

2026-03-03 23:45

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Yes, a price established by the government above the equilibrium market price is known as a price floor. This typically occurs in markets for essential goods, such as minimum wage laws in labor markets. While intended to protect producers or workers, a price floor can lead to surpluses, as the quantity supplied exceeds the quantity demanded at that higher price.

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