If the Government Removes a Binding Price Floor from a Market

question 82

Multiple Choice

If the government removes a binding price floor from a market, then the price received by sellers will

• A)​decrease, and the quantity exchanged in the market will decrease.
• B)​decrease, and the quantity exchanged in the market will increase.
• C)​increase, and the quantity exchanged in the market will decrease.
• D)​increase, and the quantity exchanged in the market will increase.

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Definitions:

Inspecting

The process of examining something carefully in order to ascertain its condition, quality, or compliance with certain standards or regulations.

Lost Profits

Financial gains that could have been earned but were not due to a breach of contract or other wrongful act.

Consequential Damages

Compensation for losses not directly caused by a breach of contract but resulting as a foreseeable consequence of the breach.

Breach of Warranty

The failure to fulfill the terms of a promise or guarantee made about the quality or functionality of a product or service.