If a price floor is not binding, then the correct answer is: a) the equilibrium price is above the price floor.
A price floor is a minimum price set by the government or an authority. When it is said to be ‘not binding,’ it means that the market equilibrium price, which is determined by supply and demand, is above this minimum price. In this scenario, the price floor does not have any effect on the market because the price can rise above the floor without any restrictions.
Choosing option b) would imply that the market price is set below the floor, which contradicts the definition of a non-binding price floor. Option c), mentioning legal enforcement, is irrelevant in this context as we are focusing on the relationship between the equilibrium price and the floor price. Lastly, option d) is incorrect because only option a) accurately describes the situation.