In a competitive market free of government regulation. price adjusts until quant

Question

In a competitive market free of government regulation. price adjusts until quantity demanded is greater than quantity supplied @ price adjusts until quantity demanded is less than quantity supplied Q price adjusts until quantity demanded equals quantity supplied supply adjusts to meet demand at every price A legal maximum on the price at which a good can be sold is called a price floor subsidy. If a price ceiling is not binding then the equilibrium price is above the price ceiling the equilibrium price is below the price ceiling it has no legal enforcement mechanism None of the above is correct because all price ceilings must be binding If a price ceiling is not binding then there will be a surplus in the market there will be a shortage in the market the market will be less efficient than it would be without the price ceiling there will be no effect on the market price or quantity sold

Explanation / Answer

Question 1)

D

At every price some quantity of goods are supplied, Sometimes that quantity can even be zero

Question 2)

D

It is calle price cieling

Question 3)

D

If price cieling is non-binding there is no need for it

Question 4)

D

There wont be any effect.

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