The price paid by buyers in a market will increase if the government
i) increases a binding price floor in that market.
Ii) increases a binding price ceiling in that market.
Iii) decreases a tax on the good sold in that market.

Question

The price paid by buyers in a market will increase if the government 
i) increases a binding price floor in that market.
Ii) increases a binding price ceiling in that market.
Iii) decreases a tax on the good sold in that market.

Quizplus · Accepted Answer

Increasing a binding price floor raises the minimum price buyers must pay, and increasing a binding price ceiling can raise prices if the ceiling is set above the equilibrium price.

The Price Paid by Buyers in a Market Will Increase