In Competitive Markets, Binding Price Floors and Binding Price Ceilings

question 49

Multiple Choice

In competitive markets, binding price floors and binding price ceilings lead to

• A) a reduction in deadweight loss.
• B) an overall increase in economic surplus, and therefore to market efficiency.
• C) a maximization of economic surplus.
• D) fairer prices for consumers and producers, and therefore are better for society as a whole.
• E) an overall reduction in economic surplus, and therefore to market inefficiency.

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