Question

a price floor is:
a. a minimum price set by the government.
b. the lowest price a producer will accept.
c. the lowest price a consumer will pay.
d. a maximum price set by the government above equilibrium price.

Explanation:

A price floor is a type of government-imposed price control that establishes a legal minimum price for a good or service, which must be set above the equilibrium price to have an effect. Option b refers to a producer's reservation price, option c refers to a consumer's reservation price, and option d describes a price ceiling (a maximum price, not minimum).

Answer:

a. a minimum price set by the government.