A binding price ceiling I.causes a surplus.
II)causes a shortagE.iiI.is set at a price above the equilibrium pricE.iv.
Is set at a price below the equilibrium pricE.
A)(ii) only
B)(iv) only
C)(i) and (iii) only
D)(ii) and (iv) only

Question

A binding price ceiling I.causes a surplus.
II)causes a shortagE.iiI.is set at a price above the equilibrium pricE.iv.
Is set at a price below the equilibrium pricE.​
A)​(ii) only
B)​(iv) only
C)​(i) and (iii) only
D)​(ii) and (iv) only

Quizplus · Accepted Answer

A binding price ceiling, when set below the equilibrium price, causes a shortage because the price is too low to clear the market, leading to higher demand than supply.

A Binding Price Ceiling I.causes a Surplus