If the Government Removes a Binding Price Floor from a Market

question 167

Multiple Choice

If the government removes a binding price floor from a market, then the price paid by buyers will

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

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Definitions:

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A market structure characterized by many firms selling products that are similar but not identical, with some degree of market power.

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