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A price ceiling is binding when it is set

a. above the equilibrium price, causing a shortage

b. above the equilibrium price, causing a surplus

c. below the equilibrium price, causing a shortage

d. below the equilibrium price, causing a surplus

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Sonal Bahl
Sonal BahlLv10
8 Jan 2021

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Related questions

If a price ceiling is to be effective, it should be set

Ā 

a. Below the equilibrium price, and it will create a market surplus.

b. Below the equilibrium price, and it will create a market shortage.

c. Above the equilibrium price, and it will create a market shortage.

d. Above the equilibrium price, and it will create a market surplus.

A price ceiling would be binding, resulting in a market shortage if it is set at:
a. above the equilibrium price
b. below the equilibrium price
Ā 
What is an unintended consequence when the government sets a price control on rental apartments?
A) Because prices are set below market clearing price, suppliers will rent more apartments causing a housing surplus.
B) Because prices are set above market clearing price, suppliers will rent fewer apartments causing a housing surplus.
C) Because prices are set below market clearing price, suppliers will rent fewer apartments causing a housing shortage.
D) Because prices are set above market clearing price, suppliers will rent fewer apartments causing a housing shortage.

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