Market demand is given as Q_D= 280 - 4P.Market supply is given as Q_S= 2P + 40.Which legally imposed price would constitute a binding price ceiling

Name: Market demand is given as Q D = 280 - 4P.Market supply is given as Q S = 2P + 40.Which legally imposed price would constitute a binding price ceiling
Brand: Quizplus
Rating: 4.9 (45 reviews)

Question

Quizplus · Accepted Answer

A binding price ceiling is set below the equilibrium price. The equilibrium price is found by setting QD = QS, which gives P = 40. Therefore, a price ceiling below $40, such as $35, would be binding.

Market Demand Is Given as QD = 280 - 4P

Market Demand Is Given as Q_D= 280 - 4P