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)taxing the good more heavily.
D)doing any of the above.

Question

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)​taxing the good more heavily.
D)​doing any of the above.

Quizplus · Accepted Answer

All the options provided, A) setting a price ceiling below the equilibrium price, B) setting a price floor above the equilibrium price, and C) taxing the good more heavily, are measures that would reduce the quantity of a good traded. Each of these actions interferes with the market's natural equilibrium, either by making the good less accessible or more expensive, thereby reducing the quantity traded.

If the Government Wanted to Reduce the Quantity of a Good