Question

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.

Answer 1

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

Step-by-step 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.