choose the right answer. In order for a price ceiling to “bind,” it a.must be set...

Question

Question

choose the right answer. In order for a price ceiling to “bind,” it a.must be set...

choose the right answer.

In order for a price ceiling to “bind,” it

a.must be set above the equilibrium price, and will likely cause a shortage.

b.must be set below the equilibrium price, and will likely cause a shortage.

c.must be set above the equilibrium price, and will likely cause a surplus.

d.must be set below the equilibrium price, and will likely cause a surplus.

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Answer:

b.must be set below the equilibrium price, and will likely cause a shortage.

explanation:

In order for a price ceiling to be binding, it must be below the free-market equilibrium price. If the price ceiling were imposed above the free-market equilibrium price, the market would continue on like nothing has happened. it will create a shortage as there will be excess demand.

Add a comment

Answer 2

Similar Homework Help Questions

econ hw please help thank you! CLILINGS AND PRICE FLOORS licymakers are more likely to impose...

econ hw please help thank you! CLILINGS AND PRICE FLOORS licymakers are more likely to impose a price ceiling: above equilibrium price in order to protect buyers from high prices. above equilibrium price in order to protect sellers from low prices. below equilibrium price in order to protect buyers from high prices. below equilibrium price in order to protect sellers from low prices. b. b. Policymakers are more likely to impose a price floor: above equilibrium price in order to...
A price ceiling that is set below the equilibrium price will cause: an increase in demand....

A price ceiling that is set below the equilibrium price will cause: an increase in demand. quantity supplied to exceed quantity demanded. total economic surplus to rise. producer surplus to fall.
1. Recall that total revenue is price times quantity (or P x Q). Which of the...

1. Recall that total revenue is price times quantity (or P x Q). Which of the following will clearly cause a decrease in the total revenue for the entire market? A. Buyers’ income decreases and sellers expect the price to decrease B. Buyers' income increases C. Tastes and preferences for the product decline D. The implementation of an effective price floor on the market E. None of the above 2. If a market is initially in equilibrium, what is the...

1. Recall that total revenue is price times quantity (or P x Q). Which of the...

1. Recall that total revenue is price times quantity (or P x Q). Which of the following will clearly cause a decrease in the total revenue for the entire market? A. Buyers’ income decreases and sellers expect the price to decrease B. Buyers' income increases C. Tastes and preferences for the product decline D. The implementation of an effective price floor on the market E. None of the above 2. If a market is initially in equilibrium, what is the...
Assume that your state government has placed a price ceiling of $.20 per kilowatt hour on...

Assume that your state government has placed a price ceiling of $.20 per kilowatt hour on electricity. The equilibrium price per kilowatt hour for electricity is $.25. The government's action will result in Question 3 options: an increase in producer surplus. a deadweight loss. a surplus of electricity in the electricity market. an increase in the price of electricity to $.25 per kilowatt hour. Question 4 (1 point) A Price Floor set below an equilibrium price is: Question 4 options:...
Beginning with equilibrium in the table above, a government imposed price ceiling at $2 A. means...

Beginning with equilibrium in the table above, a government imposed price ceiling at $2 A. means that consumption will be 48 B. cause a surplus of 36. C. cause a shortage of 48. D. means that consumption will be 84. E. will lead to an increase in demand. Price per Loaf Quantity DemandedQuantity Supplied 30 102 $5 48 84 48 84 102 30

QUESTION 39 In order to have an impact, a must be set below the equilibrium price...

QUESTION 39 In order to have an impact, a must be set below the equilibrium price and when this occurs, OA. price ceiling; producer surplus decreases O B. price support; total revenue increases O C. price floor; consumer surplus decreases OD. price ceiling: consumer surplus increases
$1.50 $1.25 0.75 In the above figure, a price ceiling of $0.75 would result in a...

$1.50 $1.25 0.75 In the above figure, a price ceiling of $0.75 would result in a remainder of 200 the equilibrium market outcome a surplus of 200 a shortage of 200
Assume the market is initially in equilibrium at point A. Then assume the city imposes a price ceiling of pz

Consider the market for apartments in New York City illustrated in the figure below. Assume the market is initially in equilibrium at point A. Then assume the city imposes a price ceiling of pz. How does this affect the market? The price ceiling results in a shortage of apartments The price ceiling results in an equilibrium where supply equals demand. The price ceiling is not binding and has no effect The price ceiling results in a surplus of apartments

Consider the table above. If the price in the market is initially set at $2, what...

Consider the table above. If the price in the market is initially set at $2, what is the result in the market, and what will eventually have to happen to move the market to equilibrium? a. Shortage, price increase b. Shortage, price decrease c. Surplus, price increase d. Surplus, price decrease Suppose a market is initially in equilibrium. Then a change occurs and the equilibrium price decreases while the equilibrium quantity increases. What change occurred in the market to cause...

choose the right answer. In order for a price ceiling to “bind,” it a.must be set...

Homework Answers

Add Answer to:
choose the right answer. In order for a price ceiling to “bind,” it a.must be set...

Post as a guest

Earn Coins

econ hw please help thank you! CLILINGS AND PRICE FLOORS licymakers are more likely to impose...

A price ceiling that is set below the equilibrium price will cause: an increase in demand....

1. Recall that total revenue is price times quantity (or P x Q). Which of the...

1. Recall that total revenue is price times quantity (or P x Q). Which of the...

Assume that your state government has placed a price ceiling of $.20 per kilowatt hour on...

Beginning with equilibrium in the table above, a government imposed price ceiling at $2 A. means...

QUESTION 39 In order to have an impact, a must be set below the equilibrium price...

$1.50 $1.25 0.75 In the above figure, a price ceiling of $0.75 would result in a...

Assume the market is initially in equilibrium at point A. Then assume the city imposes a price ceiling of pz

Consider the table above. If the price in the market is initially set at $2, what...

choose the right answer. In order for a price ceiling to “bind,” it a.must be set...

Homework Answers

Add Answer to: choose the right answer. In order for a price ceiling to “bind,” it a.must be set...

Post as a guest

Earn Coins

Add Answer to:
choose the right answer. In order for a price ceiling to “bind,” it a.must be set...