Market demand is given as Q_D= 150 - 3P.Market supply is given as Q_S= 2P + 50.Which legally imposed price would constitute a binding price ceiling

Question

Quizplus · Accepted Answer

A binding price ceiling is set below the equilibrium price. Solving for equilibrium, set Q_D = Q_S: 150 - 3P = 2P + 50, which gives P = 20. A price ceiling of $10 is below this equilibrium price, making it binding.

Market Demand Is Given as QD = 150 - 3P

Market Demand Is Given as Q_D= 150 - 3P