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Unformatted text preview: above the ceiling. When the government imposes a binding price ceiling on a competitive market, a shortage of the good arises, and sellers must ration the scarce goods among the large number of potential buyers . A price floor is a legal minimum on the price at which a good can be sold. They create a Surplus in the market when the price floor is binding or above the equilibrium price. In the case of a price floor, some sellers are unable to sell all they want at the market price...
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- Spring '11