The price paid by buyers in a market will decrease if the government

Question

Quizplus · Accepted Answer

When the government decreases a tax on a good sold in a market, the cost of production decreases for producers, which can result in a decrease in price paid by buyers. Therefore, decreasing a tax can lower the price paid by buyers. A and B are incorrect as increasing a binding price floor or ceiling would lead to an increase in price paid by buyers, not a decrease.

The Price Paid by Buyers in a Market Will Decrease