Price floors are introduced to:
(a) Help suppliers as they know that the maximum price they will receive for their output is above equilibrium.
(b) Help suppliers as they know that the minimum price they will receive for their output is above equilibrium.
(c) Help consumers to ensure that they are not exploited by producers and allow them to purchase at a price lower than equilibrium.
(d) Prevent inflation within the market.
Answer: (b) Help suppliers as they know that the minimum price they will receive for their output is above equilibrium.
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Danny Sever owns an avocado grove and sells his avocados to wholesalers. Danny has absolutely no ability to select the price. We know then that he
a. will go out of business because price will end up being lower than his costs b. is a price-maker c. is in a monopolistically competitive industry d. cannot maximize profit e. has a horizontal individual demand curve
One feature of pure monopoly is that the demand curve:
A. is vertical. B. slopes downward. C. is horizontal. D. slopes upward.