Asked by
Shahana Ahmad
on Dec 17, 2024Verified
The price paid by buyers in a market will decrease if the government
A) increases a binding price floor in that market.
B) increases a binding price ceiling in that market.
C) decreases a tax on the good sold in that market.
D) increases a tax on the good sold in that market.
Binding Price Floor
A legal minimum price for a good or service that is set above the equilibrium price, resulting in surpluses.
Binding Price Ceiling
A government-imposed limit on how high a price can be charged for a product, set below the market equilibrium price, leading to shortages.
Decreases
A reduction in size, quantity, or degree; the opposite of increases.
- Assess the influence of taxes on equilibrium in the market and price elasticity.
Verified Answer
CN
Learning Objectives
- Assess the influence of taxes on equilibrium in the market and price elasticity.