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A Price Ceiling of $8 Placed on the Market in the Graph

Question 40

Multiple Choice

A price ceiling of $8 placed on the market in the graph shown: A) is non-binding, and does not affect the market. B) is binding, and causes a shortage. C) is binding, and causes a surplus. D) is non-binding, and does not prevent the market from reaching equilibrium. A price ceiling of $8 placed on the market in the graph shown:


A) is non-binding, and does not affect the market.
B) is binding, and causes a shortage.
C) is binding, and causes a surplus.
D) is non-binding, and does not prevent the market from reaching equilibrium.

Correct Answer:

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