Suppose that a binding price floor is in place in a particular market.If the market is deregulated and the price floor is removed:
A)the quantity demanded will decrease.
B)excess demand will develop.
C)the quality of the good supplied will likely decrease.
D)quantity supplied will increase.

Question

Quizplus · Accepted Answer

When a binding price floor is removed, the market moves towards equilibrium, leading to adjustments in price and quantity that reflect true market conditions. A potential outcome is that suppliers, now facing more competition and possibly lower prices, might reduce costs by decreasing the quality of the goods supplied.

Suppose That a Binding Price Floor Is in Place in a Particular