Which of the following is an accurate statement about the consequence of nonbinding price ceilings?
A) They prevent the seller from receiving the equilibrium price.
B) They require the seller to advertise the product at the equilibrium price.
C) They create a surplus in the legal market.
D) They do not change the quantity of goods bought or sold in the legal market.
E) They increase the quantity demanded of the good in question.

Question

Quizplus · Accepted Answer

Nonbinding price ceilings do not affect the market outcome as they are set above the equilibrium price, and therefore, do not affect the behavior of buyers and sellers in the market. Thus, the quantity of goods bought or sold in the market is not affected. They also do not create a surplus or increase the quantity demanded, as there is no change in the actual market outcome. The seller is still able to receive the equilibrium price or higher, and there is no requirement for the seller to advertise at the equilibrium price or lower.

Which of the Following Is an Accurate Statement About the Consequence