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LaQwana Smith
on Oct 26, 2024

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Producers may supply a good with inefficiently high quality if the government imposes a:

A) price ceiling set above the equilibrium price.
B) price floor set below the equilibrium price.
C) binding price floor.
D) binding price ceiling.

Inefficiently High Quality

A form of inefficiency in which sellers offer high-quality goods at a high price even though buyers would prefer a lower quality at a lower price; often the result of a price floor.

Government Imposes

Actions undertaken by a government to enforce regulations, taxes, or penalties on individuals or organizations.

Binding Price Floor

A price floor set above the equilibrium price, causing a surplus because the quantity supplied exceeds the quantity demanded.

  • Achieve knowledge of the concept of price floors and how they disturb market equalization.
  • Recognize the role of price controls in creating inefficiencies in the market.
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Mercy ThompsonOct 30, 2024
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