In Order for a Price Ceiling to "Bind," It

question 36

Multiple Choice

In order for a price ceiling to "bind," it:

• A) must be set above the equilibrium price, and will likely cause a shortage.
• B) must be set below the equilibrium price, and will likely cause a shortage.
• C) must be set above the equilibrium price, and will likely cause a surplus.
• D) must be set below the equilibrium price, and will likely cause a surplus.

---

Definitions:

Long-Term Liabilities

Financial obligations of a business that are due more than one year in the future, such as bonds payable, long-term loans, and lease obligations.