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    Market consequences of a price floor

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    The market consequences of a price floor are discussed. There are only two alternatives, a price floor set lower that what already exists in the market, and a price floor set higheer than the existing market price. The two resulting outcomes of these strategies are provided.

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    Solution Preview

    A price floor is set by the government to protect the producer of the good to which the price floor has been attached. There are two possible outcomes for the market in price floor setting. If the ...

    Solution Summary

    The expert examines the marketing consequences of a price floor.