San Francisco decides to remove a binding price ceiling on rail fares. Which of the following is likely to happen in the market?
A)The number of available trains will go down.
B)Train tickets will become cheaper.
C)Overcrowding on trains will go down.
D)The demand for train tickets will increase.

Question

Quizplus · Accepted Answer

Removing a binding price ceiling typically allows prices to rise to the equilibrium level, which can reduce the quantity demanded and alleviate overcrowding, as the service (in this case, train rides) becomes more expensive and less people choose or can afford to use it.

San Francisco Decides to Remove a Binding Price Ceiling on Rail