Question

think: who benefits from a price floor? who is hurt?

Explanation:

A price floor is a legal minimum price set above the equilibrium market price. Sellers who are able to sell their goods at this higher price gain, as they receive more revenue per unit sold. This often includes producers of commodities with price supports, like farmers for certain crops. However, consumers are hurt because they pay a higher price, reducing their purchasing power and the quantity of the good they can buy. Additionally, sellers who cannot find buyers at the higher price (due to excess supply created by the price floor) are also negatively affected, as they have unsold inventory.

Answer:

• Who benefits: Sellers/producers who can sell their goods at the above-equilibrium price floor (e.g., subsidized farmers, workers in markets with minimum wage, a type of price floor for labor).
• Who is hurt: Consumers (who pay higher prices and buy less), and sellers/producers who cannot sell their goods due to the excess supply created by the price floor.