If the equilibrium price for some product is $1000,a price ceiling of $1200 will result in
A)the same general effects as a price floor of $1200.
B)the same general effects as an administered price of $1200.
C)the same general effects as a price ceiling of $600.
D)massive surpluses of the good.
E)no effects because the price ceiling is not binding at that price.

Question

Quizplus · Accepted Answer

A price ceiling of $1200 is not binding if the equilibrium price is $1000, so there will be no effects on the market.

If the Equilibrium Price for Some Product Is $1000,a Price