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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