To say that a price ceiling is binding is to say that the price ceiling
A)results in a shortage.
B)is set below the equilibrium price.
C)causes quantity demanded to exceed quantity supplied.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

A price ceiling is an artificial maximum set by the government below the equilibrium price. If the price ceiling is binding, it means it is set below the equilibrium price and causes quantity demanded to exceed quantity supplied, resulting in a shortage. Thus, all three options are correct.

To Say That a Price Ceiling Is Binding Is to Say