A non-binding price ceiling I.causes a surplus.
II)causes a shortagE.iiI.is set at a price above the equilibrium pricE.iv.
Is set at a price below the equilibrium pricE.
A)(i) only
B)(iii) only
C)(i) and (iii) only
D)(ii) and (iv) only

Question

A non-binding price ceiling I.causes a surplus.
II)causes a shortagE.iiI.is set at a price above the equilibrium pricE.iv.
Is set at a price below the equilibrium pricE.​
A)​(i) only
B)​(iii) only
C)​(i) and (iii) only
D)​(ii) and (iv) only

Quizplus · Accepted Answer

A non-binding price ceiling is set above the equilibrium price, meaning it does not affect the market equilibrium, as the market price is already below the ceiling.

A Non-Binding Price Ceiling I.causes a Surplus