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A government-imposed price of $12 in this market is an example of a: a. Non-binding price ceiling that creates a shortage, b. Non-binding price floor that creates a surplus, c. Binding price
A price ceiling above $25 per box is not a binding price ceiling in this market. (Economists call a price ceiling that prevents the market from reaching equilibrium a binding price ceiling.)
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Short questions
The Bonomist - At figure 1: Because the price ceiling is above the market equilibrium, so the price ceiling is not binding AT figure 2: Because the price ceiling is below the
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