To say that a price ceiling is nonbinding is to say that the price ceiling
A)results in a surplus.
B)is set above the equilibrium price.
C)causes quantity demanded to exceed quantity supplied.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

A nonbinding price ceiling is one that is set above the equilibrium price, meaning the market price is already lower than the ceiling, and therefore has no effect on market outcomes. It does not result in a surplus or cause quantity demanded to exceed quantity supplied.

To Say That a Price Ceiling Is Nonbinding Is to Say