(Figure: Market) Refer to the graph. Suppose that a binding price floor of $35 is removed. The number of consumers who are able to purchase the product will:
A)decrease from 40 to 35.
B)decrease from 50 to 25.
C)increase from 30 to 50.
D)increase from 25 to 50.

Question

(Figure: Market) Refer to the graph. Suppose that a binding price floor of $35 is removed. The number of consumers who are able to purchase the product will: 
A)decrease from 40 to 35. 
B)decrease from 50 to 25. 
C)increase from 30 to 50. 
D)increase from 25 to 50.

Quizplus · Accepted Answer

When the binding price floor of $35 is removed, the price is allowed to fall back to its equilibrium level of $25. At this price, the quantity demanded increases from 25 to 50, as more consumers are now able to afford the product. Therefore, the number of consumers who are able to purchase the product increases from 25 to 50.

(Figure: Market) Refer to the Graph