Which of the following is true of price ceilings?
A) With a non- binding ceiling price an excess demand for the product will develop.
B) With a binding ceiling price a surplus of the commodity will develop.
C) Firms must charge the price established as a price ceiling.
D) If the ceiling price is set above the free- market equilibrium price it will have no effect on the market.
E) A ceiling price below the free- market equilibrium price is not binding.
Correct Answer:
Verified
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