A nonbinding price ceiling
i) causes a surplus.
Ii) causes a shortage.
Iii) is set at a price above the equilibrium price.
Iv) is set at a price below the equilibrium price.

Question

A nonbinding price ceiling 
i) causes a surplus.
Ii) causes a shortage.
Iii) is set at a price above the equilibrium price.
Iv) is set at a price below the equilibrium price.

Quizplus · Accepted Answer

A nonbinding price ceiling is set above the equilibrium price, meaning it does not affect the market equilibrium, as the market price is already below the ceiling.

A Nonbinding Price Ceiling