What Consequences Will a Binding Price Ceiling Have

question 99

Multiple Choice

What consequences will a binding price ceiling have?

• A) There will be downward pressure on prices until quantity demanded equals quantity supplied.
• B) There will be upward pressure on prices until quantity demanded equals quantity supplied.
• C) There are no consequences to a binding price ceiling.
• D) The quantity demanded will always exceed the quantity supplied.
• E) The quantity demanded will always be smaller than the quantity supplied.

---

Definitions:

Broad Bands

A strategy in pay structure where a wide range of salaries is offered within a single pay band, allowing for greater flexibility in employee payment.

Promoting Employees

The process of advancing an employee's rank or position within a company, often accompanied by an increase in salary and responsibilities.

Davis-Bacon Act

A United States federal law that establishes the requirement for paying the local prevailing wages on public works projects for laborers and mechanics.

Prevailing Wages

The standard or most common wages determined by governmental or regulatory bodies, often used in context to ensure fair compensation in public contracts.