Demonstrate how a price floor is like a tax on consumers and a subsidy to suppliers. Label
Question:
Demonstrate how a price floor is like a tax on consumers and a subsidy to suppliers. Label the following: tax on consumers, transfer of surplus to suppliers, and welfare loss.
a. Who gets the revenue in the case of a tax?
b. Who gets the revenue in the case of a price floor?
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A price floor is a governmentimposed limit on how low a price can be charged for a product or servic...View the full answer
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