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Question
Which of the following is an accurate statement about the consequence of a binding price floor?
a. Binding price floors do not allow sellers to receive a higher price if they sell the product in the legal market.
b. Binding price floors encourage the formation of a black market.
c. Binding price floors discourage the formation of a black market.
d. Binding price floors create a shortage of the product.
e. Binding price floors cause consumers to want to purchase more of the product in the legal market.
Answer
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