To be binding,a price ceiling must be set at a price _____ the equilibrium price.
A)lower than
B)higher than
C)the same as
D)Any price ceiling is binding.

Question

Quizplus · Accepted Answer

A price ceiling set below the equilibrium price will create a shortage of goods or services. Thus, suppliers will lack incentives to produce, and consumers will try to purchase more at a lower price, resulting in excess demand.

To Be Binding,a Price Ceiling Must Be Set at a Price