What statement about price floors is correct? A. price floors lower both supply and demand
B. price floors increase both supply and demand
C. price floors lower demand and increase supply
D. price floors increase demand and decrease supply

C. price floors lower demand and increase supply

Explanation:

"Price floors" are set by the government in order to prevent the prices of goods from going lower. This is meant to protect the sellers; thus, when this happens, more sellers are inclined to produce more products. This means that the supply increases. Since the product price is sometimes set more than the equilibrium price, the consumers are drawn away from buying the good and find alternative goods instead. So, this decreases the demand and creates a surplus.

every society, in order to meet the needs of it's people, has to answer three basic questions:

- what should we produce?

- how should we produce it?

- for whom should we produce it?

this questions must be answered in order to, option b, aid in production decisions.

every country can't produce everything, no matter how rich their land is. it may be a matter of technology, resources or geographical conditions. so, these three questions must be resolved in order to get the most of the production of each land.

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