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If a price ceiling is not binding,
a. the equilibrium price is above the ceiling.
b. the equilibrium price is below the ceiling.
c. it has no legal enforcement mechanism.
d. people must voluntarily agree to abide by it.
[iii]. If a binding price ceiling is imposed in a market
a. there will be a surplus in the market.
b. the price will be legally forced toward equilibrium price.
c. there will be a shortage in the market.
d. market forces will guarantee that the price will be at equilibrium.
[iv]. In which panel(s) in the figure shown would there be a shortage for CDs at the ceiling price?
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