Praxis II Citizenship

Answer: C - Price floors generally lead to a surplus of the good in the marketplace. The only way to affect an economic outcome with a price floor is to establish it at a price point that is above the product’s equilibrium price. They are established to benefit sellers. By keeping prices higher than the equilibrium price, the sellers are earning more than they’re spending even though demand is decreasing for the good. The increase in revenue causes them to keep making the good.