The price received by sellers in a market will decrease if the government a. imposes a binding price floor in that market. b. decreases a binding price ceiling in that market. c. decreases a tax on the good sold in that market. d. increases a binding price floor in that market.

Question

Business

Monique Beard

16 October, 00:38

The price received by sellers in a market will decrease if the government a. imposes a binding price floor in that market. b. decreases a binding price ceiling in that market. c. decreases a tax on the good sold in that market. d. increases a binding price floor in that market.

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Answers (1)

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Houston Eaton · Answer 1

The price received by sellers in a market will decrease if the government imposes a binding price floor in that market.

Explanation:

If the government imposes a binding price floor in the market, this would make the binding price ceiling to occur below the equilibrium price.

The lower price would generate a shortage of housing by increasing the quantity demanded and reducing the quantity supplied.

Therefore, the price received by sellers in a market will decrease if the government imposes a binding price floor in that market.