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f the government imposes a binding price ceiling in a market, then the producer surplus in that market will increase.

User Lunohodov
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Answer: This statement is FALSE

Step-by-step explanation:

Price Ceiling is the maximum price fixed by government , usually less than equilibrium price to make necessity goods affordable to max people.

Producer Surplus is the difference between prevailing price & minimum price needed to induce producers to supply . Diagramaticaly / Graphicaly , it is the vertical difference between supply curve & price level

Implying Ceiling Imposition , the price gets reduced . Assuming unchanged Supply curve , the difference between price & supply curve reduces .

Hence , Producer Surplus falls

User Soberman
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