Which of the following changes to the market in the graph shown could cause the price floor to become non-binding?
Which of the following changes to the market in the graph shown could cause the price floor to become non-binding?
Multiple Choice
Supply could decrease, and shift to the left.
Supply could increase, and shift to the right.
Demand could decrease, and shift to the left.
Supply could increase, and shift to the left.
Homework Answers
For the price floor to become non-binding, it must be imposed below the equilibrium so the price must increase
therefore, supply could decrease and shift to the left in which case, the price will increase
option(A)
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