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Government-imposed price floors may increase the price, but they also typically lead to: 1. persistent surpluses 2. disposal problems

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Government-imposed price floors may increase the price, but they also typically lead

to:

     1.  persistent surpluses

     2.  disposal problems

     3.  unwanted and inefficient discounts

     4.  overinvestment in the industry

Can you explain how, and why is this overinvestment a bad thing?

 
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