Question

When a binding price ceiling is imposed on a market to benefit buyers,

A. every buyer in the market benefits.
B. every buyer and seller in the market benefits.
C. every buyer who wants to buy the good will be able to do so, but only if he waits in long lines.
D. some buyers will not be able to buy any amount of the good.

Answer 1

D

Step-by-step explanation:

Price ceiling is when the government or an agency of the government sets the maximum price for a product. It is binding when it is set below equilibrium price.

When a binding price ceiling is imposed, there would be an excess of demand over supply. this would lead to a scarcity. As a result, some buyers would not b able to buy any amount of good

Effects of a price ceiling

1. It leads to shortages
2. it leads to the development of black markets
3. it prevents producers from raising price beyond a certain price
4. It lowers the price consumers pay for a product. This increases consumer surplus