If the equilibrium price for some product is $1000, a price ceiling of $1200 will result in
A) massive surpluses of the good.
B) the same general effects as a price floor of $1200.
C) the same general effects as an administered price of $1200.
D) the same general effects as a price ceiling of $600.
E) no effects because the price ceiling is not binding at that price.
Answer: E) no effects because the price ceiling is not binding at that price.
You might also like to view...
An example of the tragedy of the commons is:
a. no worldwide fuel economy standard. b. overfishing in international waters. unsafe fishing practices that trap c. dolphins and sea turtles. d. illegal copyright infringement.
Based on Scenario 1 above critically evaluate the following statement. "Because of the productivity differential between the two men we can conclude that the young man has a comparative advantage in the production of everything over the older man
What will be an ideal response?