Final answer:
A price ceiling can be binding or non-binding depending on market demand and the equilibrium price. The correct option is a.
Step-by-step explanation:
A price ceiling is the maximum price that can legally be charged for a particular good or service. It is typically set below the equilibrium price in an effort to make the good more affordable. Whether a price ceiling is considered binding or non-binding depends on the market demand and the equilibrium price.
If the market demand is greater than or equal to the equilibrium price, the price ceiling will be non-binding because sellers can still sell the good at the equilibrium price. On the other hand, if the market demand is less than the equilibrium price, the price ceiling will be binding because sellers are not able to sell the good at the equilibrium price and will be forced to sell at the price ceiling.
Therefore, the correct answer is a. Non-binding if the market demand is Demand A, and binding if the market demand is Demand B.