Price floors works exactly how price ceilings work, and hence, have four parallel effects: Surpluses, Lost gains from trade (deadweight loss), Wasteful increases in quality and again misallocation of resources

False

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True

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Solution

The correct option is A
False

False. Price floors works the exact opposite of how price ceilings work, and hence, have four opposite effects: Surpluses, Lost gains from trade (deadweight loss), Wasteful increases in quality and again misallocation of resources

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Similar questions

Price ceilings that involve a maximum price below the market price create five important effects: Shortages, Reduction in Product Quality, Wasteful Lines and Other Search Costs, Loss of Gains from Trade & Misallocation of Resources.

Lost gains from trade is called deadweight loss.

Q. The loss of surplus resulting from misallocation of resources is called .

Q. As the result of a price ceiling, the producer surplus reduced from Rs 1,000 to Rs 500 and consumer surplus reduced from Rs 2,000 to Rs 1,200. The deadweight loss is _____.

Q. With the increase in prices the consumer surplus ____________

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Price floors works exactly how price ceilings work, and hence, have four parallel effects: Surpluses, Lost gains from trade (deadweight loss), Wasteful increases in quality and again misallocation of resources

The correct option is A False False. Price floors works the exact opposite of how price ceilings work, and hence, have four opposite effects: Surpluses, Lost gains from trade (deadweight loss), Wasteful increases in quality and again misallocation of resources

The correct option is A
False

False. Price floors works the exact opposite of how price ceilings work, and hence, have four opposite effects: Surpluses, Lost gains from trade (deadweight loss), Wasteful increases in quality and again misallocation of resources