The quantity sold in a market will decrease if the government decreases a

Question

Quizplus · Accepted Answer

A binding price ceiling sets a maximum price for a good, so sellers cannot charge more than that price. This often leads to shortages because the quantity demanded exceeds the quantity supplied at the lower price. Therefore, decreasing a binding price ceiling in a market would likely increase the quantity sold, not decrease it. On the other hand, decreasing a tax or a binding price floor would likely increase the quantity sold, so option D is incorrect. Hence, the correct answer is B.

The Quantity Sold in a Market Will Decrease If the Government