Which of the following is an example of a price floor?
A) a law passed in a city to lower apartment rents by setting the maximum price that can be charged for rent
B) an equilibrium price
C) a minimum wage law
D) a law setting the highest price that can legally be charged for a gallon of gasoline.
E) None of the above answers give examples of a price floor.

Question

Quizplus · Accepted Answer

A minimum wage law is an example of a price floor as it sets a minimum price that employers must pay their employees. This creates a situation where the price cannot fall below this level, which can lead to higher wages but can also lead to reduced employment opportunities for low-skilled workers. Options A, B, and D represent examples of price ceilings, which set maximum prices, and are not examples of price floors. Option E is incorrect as there is a correct example of a price floor among the given answer choices.

Which of the Following Is an Example of a Price