If the government wanted to reduce the quantity of a good traded,it could do so by:
A) setting a price ceiling for the good below the equilibrium price.
B) setting a price floor for the good above the equilibrium price.
C) tax the good more heavily.
D) doing any of the above.

Question

Quizplus · Accepted Answer

All options can reduce the quantity traded: a price ceiling below equilibrium creates a shortage, a price floor above equilibrium creates a surplus, and higher taxes increase costs, reducing demand.

If the Government Wanted to Reduce the Quantity of a Good