Total surplus in a market will increase when the government
A)imposes a tax on that market.
B)imposes a binding price floor on that market.
C)removes a binding price ceiling from that market.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

A binding price ceiling creates a shortage in the market, causing a decrease in total surplus. Removing the price ceiling will lead to an increase in market efficiency and total surplus.

Total Surplus in a Market Will Increase When the Government