Consider the U.S. market for chocolate, a market in which the government has imposed a nonbinding price ceiling. Which of the following events could convert the price ceiling from a nonbinding to a binding price ceiling?
A) A government study that shows that consuming chocolate increases the incidence of cancer.
B) A large increase in the size of the cocoa bean crop; cocoa beans are used to produce chocolate.
C) South American cocoa bean producers refuse to ship to chocolate producers in the United States.
D) A sharp drop in consumer income; chocolate is a normal good.
Correct Answer:
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