If the government removes a binding price floor from a market, then the price paid by buyers will
A)increase, and the quantity sold in the market will increase.
B)increase, and the quantity sold in the market will decrease.
C)decrease, and the quantity sold in the market will increase.
D)decrease, and the quantity sold in the market will decrease.

Question

Quizplus · Accepted Answer

Removing a binding price floor typically leads to a decrease in price, as the market moves towards equilibrium, and an increase in the quantity sold, as more consumers are willing to buy the product at the lower price.

If the Government Removes a Binding Price Floor from a Market