econ price floor

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You are about to participate in an experiment about how markets work when the government imposes a price floor on goods or​ services; in this​ case, the market for cranberries. A price floor is a price control. It places a lower limit on the price of cranberries. As the price of cranberries​ can't fall below this​ amount, a price floor typically favors sellers. For​ example, if the price floor is​ $10.00, buyers​ can't legally offer less than this​ amount, regardless of market conditions such as demand and supply. if price floor is 13.00

13.50

You are a seller in a market with a price control. Your costs of production are ​$2.00 per​ unit, and a price floor is put on the market at ​$1.50. The lowest acceptable ask price for you would be

2.00

You are a seller in a market with a price control. Your costs of production are ​$2.25 per​ unit, and a price floor is put on the market at ​$1.50. The lowest acceptable ask price for you would be

2.25

Which of the following is an example of a price​ floor?

A law that says employers cannot pay less than​ $8 per hour

In the price floors​ experiment, the first 2 rounds are free market rounds and rounds 3 and 4 impose a price floor. In your role as a​ seller, which of the following is​ true?

During the free market​ rounds, you only need to consider your costs to determine your ask​ price; during the price floor​ rounds, you must consider costs and the price floor.

Which of the following is likely to happen after a price floor is​ removed?

Sellers have sales offering prices lower than those under the price control.

Which of the following accurately describes what would happen after the removal of a price​ floor?

The price would​ fall, quantity supplied would​ fall, and quantity demanded would rise.

In each round of the market experiment​ "Price Floors" you will be a seller. In the first two rounds you will be a seller in a free market. As a​ seller, you will make an​ "ask," where you offer a price at which you agree to sell the product. As a​ seller, before each round​ begins, you will be told your cost of producing a single unit of the good. You will not be able to ask a price that is lower than your cost. For​ example, if your cost is​ $10.00, you cannot ask​ $9.99. Your goal is to ask for and sell the good for the highest possible​ price, in order to maximize your gain​ (the difference between an accepted ask and your​ cost). In the third and fourth​ rounds, you will also post asks based on your cost and you will have the added restriction of a price floor. You​ won't be able to ask for an amount lower than either your cost or the price floor. Your cost changes each round

as a seller you will make an ask, sell as a seller your cost is lowest as a seller in the free market rounds 9.00 as a seller in the price floor 11.50 as a seller, if your cost is 8.50 and you sell for 11.25 what is your gain 2.75

In rounds 3 and 4 of the price floors​ experiment, part of the transactions screen will be grayed out with a message that says ​ "It is illegal to trade in this​ area." The grayed out area represents prices

below

A price floor is

favor sellers but hurts them by causing surpluses.

There are 4 rounds of play in the market experiment​ "Price Floors." In the first 2​ rounds, you will sell the cranberries in a free market​, with no imposed price​ control, alongside virtual players. In the last 2​ rounds, you will sell cranberries in a market that has a price floor

in this experiment there will be 4 rounds, free market, price floor

A price floor

results in the quantity supplied being greater than the quantity demanded.


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