A binding price ceiling will have the following consequences:
A) There will be downward pressure on prices until quantity demanded equals quantity supplied.
B) There will be upward pressure on prices until quantity demanded equals quantity supplied.
C) There are no consequences to a binding price ceiling.
D) The quantity demanded will always exceed the quantity supplied.
E) The quantity demanded will always be smaller than the quantity supplied.

Question

Quizplus · Accepted Answer

A binding price ceiling is set below the equilibrium price, leading to a shortage where the quantity demanded exceeds the quantity supplied.

A Binding Price Ceiling Will Have the Following Consequences