Market demand is given as Q_D= 100 - P.Market supply is given as Q_S= 4P.Which legally imposed price would constitute a binding price ceiling

Name: Market demand is given as Q D = 100 - P.Market supply is given as Q S = 4P.Which legally imposed price would constitute a binding price ceiling
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Question

Quizplus · Accepted Answer

A binding price ceiling is set below the equilibrium price. The equilibrium price is where Q_D = Q_S. Solving 100 - P = 4P gives P = 20. A price ceiling of $10 is below this equilibrium price, making it binding.

Market Demand Is Given as QD = 100 - P

Market Demand Is Given as Q_D= 100 - P