Asked by
pablo escobar
on Nov 17, 2024
Verified
A binding price ceiling causes a shortage in the market.
Binding Price Ceiling
A price ceiling set below the equilibrium price, leading to a shortage of goods since demand exceeds supply at the set price.
Market Shortage
A condition in which the quantity demanded of a good exceeds the quantity supplied at the market price.
- Identify the distinctions between binding and nonbinding price controls and their consequences.
- Understand the impacts of implementing price ceilings, like the emergence of shortages, systems of rationing, and the disruption of market efficiency.
Verified Answer
LB
Learning Objectives
- Identify the distinctions between binding and nonbinding price controls and their consequences.
- Understand the impacts of implementing price ceilings, like the emergence of shortages, systems of rationing, and the disruption of market efficiency.