Which of the following would increase quantity supplied, decrease quantity demanded, and increase the price that consumers pay?

Question

BlackTom AI · Accepted Answer

Question restatement: Identify which policy/action would raise quantity supplied, lower quantity demanded, and raise the price paid by consumers.
Option 1: The imposition of a binding price floor. This directly sets a minimum price above the market-clearing level, which typically causes producers to increase quantity supplied because the price is higher, while reducing quantity demanded because consumers buy less at the higher price; the market price ends up above equilibrium, so consumers pay more. This matches the described effects.
Option 2: The removal of a binding price floor. Removing a binding price floor would let the market return to equilibrium without the constraint, likely lowering the price toward the former equilibrium, decreasing quantity supplied, and increasing quantity demanded. This does not produce the combination of higher price, higher supply, and lower demand.
Option 3: The passage of a tax levied on producers. A tax on producers shifts supply leftward (decreases supply) and raises the price paid by consumers while reducing quantity traded. This would not increase quantity supplied; in fact, it reduces it, and the price effect is more nuanced but typically does not result in a straightforward increase in price borne by consumers alone as described.
Option 4: The repeal of a tax levied on producers. Repealing a tax shifts supply rightward (increases supply), lowers the market price, and increases quantity demanded. This would decrease price paid by consumers and increase quantity demanded, opposite to the effect described.
In summary, only the binding price floor would generate the combination: higher quantity supplied, lower quantity demanded, and a higher price paid by consumers. The other options fail to produce that specific set of impacts due to how price controls and taxes interact with supply and demand dynamics.

Which of the following would increase quantity supplied, decrease quantity demanded, and increase the price that consumers pay?单项选择题

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Which of the following would increase quantity supplied, decrease quantity demanded, and increase the price that consumers pay?单项选择题

类似问题

Figure 6-4 Graph (a) Graph (b) ​ ​ Refer to Figure 6-4. In graph (b), there will be

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22. The price floor ( min price) creates excess supply (surplus)

If a price floor at P4 is set to help farmers in terms of income and government wants to assure farmers that their output will be purchased, the government would have to purchase an amount of output equal to:

When the government imposes a binding price floor, it causes

When a government sets a price floor, what is the expected outcome?

When a government sets a price floor, what is the expected outcome?

更多留学生实用工具

希望你的学习变得更简单

Figure 6-4 Graph (a) Graph (b) Refer to Figure 6-4. In graph (b), there will be