What Will a Price Ceiling That Is Not Binding Do

question 169

Multiple Choice

What will a price ceiling that is not binding do

• A)It will cause a surplus in the market.
• B)It will cause a shortage in the market.
• C)It will cause the market to be less efficient.
• D)It will have no effect on the market price.

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Definitions:

Landlords

Individuals or entities that own property and rent it out to tenants in exchange for rent payments.

Subsidizing Rent

A government policy of providing financial assistance to help cover the cost of rent for individuals or households.

Elastic

Describes how much the quantity demanded of a good responds to a change in the price of that good, with higher elasticity indicating a greater response.

Foreign Visitors

Individuals from other countries who travel to a country for various purposes such as tourism, business, or education.