If a binding price ceiling is imposed on the computer market,then

Question

Quizplus · Accepted Answer

When a binding price ceiling is imposed on a market, it means that the price cannot exceed a certain level. In the case of the computer market, this would mean that the price of computers would have to be lower than it would be without the price ceiling. As a result, consumers would be more likely to want to buy computers at this lower price. Meanwhile, computer manufacturers would have less incentive to produce computers because they would not be able to sell them for as much money. Therefore, the supply of computers would decrease. With higher demand and lower supply, a shortage of computers would develop.

If a Binding Price Ceiling Is Imposed on the Computer