Why are binding price floor laws passed?
A) They make goods less expensive.
B) They make goods available to the largest number of customers.
C) They encourage producers to produce goods in the most cost-efficient fashion.
D) They help producers receive higher prices for products sold in the legal market.
E) They discourage the formation of illegal black markets.

Question

Quizplus · Accepted Answer

Binding price floors are passed to benefit producers by setting a minimum price higher than the equilibrium price. This helps ensure that producers can receive a higher price for their products sold in the legal market.

Why Are Binding Price Floor Laws Passed