FIGURE 5- 1
-Refer to Figure 5- 1. In this market, suppose the government announces that the price must be P3 or lower. This price (P3) is referred to as

Question

Quizplus · Accepted Answer

P3 is a price imposed by the government, which means it is a price ceiling. Since the government has set a maximum price, it is considered a binding price ceiling if it is below the equilibrium price.

FIGURE 5- 1 -Refer to Figure 5- 1. in This Market, Suppose the Market