Which of the Following Is True of Price Ceilings

question 1

Multiple Choice

Which of the following is true of price ceilings?

• A)Firms must charge the price established as a price ceiling.
• B)If the ceiling price is set above the free-market equilibrium price it will have no effect on the market.
• C)A ceiling price below the free-market equilibrium price is not binding.
• D)With a non-binding ceiling price an excess demand for the product will develop.
• E)With a binding ceiling price a surplus of the commodity will develop.

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Definitions:

Launch

The initiation or start of a project, product, or service.

Economic Independence

The state of having sufficient personal wealth to live, without having to work actively for basic necessities.

Entrepreneurship

The activity of setting up a business or businesses, taking on financial risks in the hope of profit.

Economic Independence

The state of having sufficient personal wealth to live, without needing to work actively for basic necessities, allowing individuals or nations to have control over their financial future.