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Supply Curve in the Short Run and the Long Run

Study the dia...

Question

Study the diagram below, and answer the following questions.

Which of the following lines represents the price floor?

[1 mark]

A

AC

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B

BK

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C

CM

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D

FH

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Solution

The correct option is A AC
Price floors and price ceilings are government-imposed minimums and maximums on the prices of certain goods or services. Price floor is always above the equilibrium point.

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