Final answer:
The statement regarding market penetration is false; this strategy uses low prices to build market share. The greatest impact of a price floor occurs when it's set substantially above the equilibrium price. Sellers might sell below equilibrium price for various competitive reasons.
Step-by-step explanation:
The statement "A market penetration pricing strategy calls for setting price levels that are high enough to quickly build market share" is false. Market penetration pricing strategy actually involves setting a low price for a new product in order to attract a large number of customers and gain a significant market share quickly. Once the market share has been captured, companies may gradually increase the price.
Connecting to the concept of price floors, the most accurate statement regarding its impact is: a price floor will have the largest effect if it is set substantially above the equilibrium price. A price floor set below the equilibrium price would not have much effect, as the market price would naturally be above it anyway.
A price slightly above equilibrium can have a mild effect, causing some surplus, but it is the price floor set substantially above equilibrium that causes the largest surplus and the most market distortion, creating significant excess supply.
Considering the context given from Chapter 8 and the goods market, the statement "No seller would be willing to sell for less than the equilibrium price" is false because in a competitive market, sellers may reduce their prices for a variety of reasons, such as to clear excess inventory, meet a competitor's price, or stimulate demand.