A binding price ceiling would result in a(n):
A)surplus of the good.
B)shortage of the good.
C)quantity control.
D)equilibrium price.

Question

Quizplus · Accepted Answer

A binding price ceiling is a government-imposed limit on how high a price can be charged for a good or service. If the ceiling is set below the equilibrium price, it will create a shortage of the good because the quantity demanded of the good will exceed the quantity supplied. This shortage can lead to long lines or waiting lists, black markets, or a decrease in the quality of the good. Thus, a binding price ceiling would result in a shortage of the good.

A Binding Price Ceiling Would Result in A(n)