A Price Ceiling That Is Set at $8 in the Market

question 98

Multiple Choice

A price ceiling that is set at $8 in the market shown in the graph is:

• A) non-binding and would not affect the market.
• B) binding and would cause a shortage.
• C) binding and would cause excess supply.
• D) non-binding and would not prevent the market from reaching equilibrium.

---

Definitions:

Sale For Goods

A transaction involving the transfer of ownership of goods from a seller to a buyer for a price.

Auto Dealer

A business entity that sells new or used cars at the retail level, based on a dealership contract with an automaker.

Pre-owned Vehicle

A vehicle that has had one or more previous owners, commonly referred to as a used car.

Promotes Commerce

Enhances or encourages the exchange of goods and services among parties, often leading to economic growth.