Which of the following will decrease the amount of a good that is traded in the market?
A) price floors and price ceilings
B) excise taxes,price floors,and subsidies
C) excise taxes
D) subsidies
E) price floors,price ceilings,and excise taxes

Question

Quizplus · Accepted Answer

Price floors and price ceilings directly limit the amount of the good traded by setting a maximum or minimum price. Excise taxes increase the cost of production or consumption, which can decrease demand and trade. Subsidies, on the other hand, incentivize production and can increase the amount of the good traded. Therefore, the combination of price floors, price ceilings, and excise taxes will decrease the amount of the good traded in the market.

Which of the Following Will Decrease the Amount of a Good