Economics20795 marksPrice floor and effects
Discuss the government intervention in market through price floor, price ceiling and tax effect.
Discuss the government intervention in market through price floor, price ceiling and tax effect. [5]
A price floor is the minimum legal price set by the government below which a good cannot be sold. Characteristics: - Set above the equilibrium price - Creates a binding constraint on the market - Results in surplus (excess supply) - Example: Minimum wage laws, agricultural price supports Effects:...