Binding Price Floor Defined A binding price floor occurs when the government sets a required price on a good or goods at a price above equilibrium. Because the government requires that prices not drop below this price, that price binds the market for that good.Click to see full answer. Simply so, when there is a binding price floor quizlet? Terms in this set (13) this happens when it is set above equilibrium price. what will happen when a price floor is binding? the price will be too high for consumers, which means demand will be low and supply will be high. this can cause a surplus of product.Also, when a price floor is binding the equilibrium price is? A price floor is the minimum price that can be charged. An effective (or binding) price floor is one that is set above equilibrium price. An effective (or binding) price ceiling is one that is set below equilibrium price. Furthermore, what happens when a binding price floor is removed? They make a good less expensive for those customers who are able to purchase the good in the legal market. What will happen in a market where a binding price ceiling is removed? It makes the price so low that the quantity demanded exceeds the quantity supplied in the legal market.Who benefits from a binding price floor?Price floors such as minimum wage benefits consumers by ensuring reasonable pay. Price ceilings such as rent control benefit consumers by preventing sellers from over charging which, in the long run, will ensure viable and afforadle homes.

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