f the government imposes a binding price ceiling in a market, then the producer surplus in that market will increase.

Answer: This statement is FALSE

Explanation:

Price Ceiling is the maximum price fixed by government, usually less than equilibrium price to make necessity goods affordable to max people.

Producer Surplus is the difference between prevailing price & minimum price needed to induce producers to supply. Diagramaticaly / Graphicaly, it is the vertical difference between supply curve & price level

Implying Ceiling Imposition, the price gets reduced. Assuming unchanged Supply curve, the difference between price & supply curve reduces.

Hence, Producer Surplus falls