Final answer:
A price ceiling can be binding or non-binding depending on the market demand. If the market demand is less than or equal to the price ceiling, it is binding. If the market demand is greater than the price ceiling, it is non-binding.
Step-by-step explanation:
A price ceiling is a legal restriction on the maximum price that can be charged for a good or service. In this case, the government has imposed a price ceiling at $6. To determine if the price ceiling is binding or non-binding, we need to compare it to the market demand.
a) If demand A is greater than or equal to $6, then the price ceiling is non-binding because the market price is already higher than the ceiling.
b) If demand A is less than $6 and demand B is greater than or equal to $6, then the price ceiling is binding because the market price is below the ceiling and the government-imposed price becomes the maximum price that can be charged.
c) If demand A and demand B are both less than $6, then the price ceiling is non-binding regardless of the market demand.
d) If demand A and demand B are both greater than or equal to $6, then the price ceiling is binding regardless of the market demand.