Suppose that, in a competitive market without government regulations, the equilibrium price of rental cars is $58 per day. Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding. Statement Price Control and Binding or NotThe government prohibits car-rental companies from renting out rental cars for more than $87 per day. Price Control (Price Ceiling Or Price Floor)? Binding or Not Binding?Due to new regulations, car-rental companies that would like to pay better wages in order to hire more workers are prohibited from doing so. Price Control (Price Ceiling Or Price Floor)? Binding or Not Binding?The government has instituted a legal minimum price of $87 per day for rental cars. Price Control (Price Ceiling Or Price Floor)? Binding or Not Binding?

1. Price ceiling non binding

2. Price ceiling, binding

3. Price floor binding

Explanation:

A price ceiling is when the government or an agency of the government sets the maximum price for a good or service.

Price ceiling is binding if it is set below equilibrium price.

A price floor is when the government or an agency of the government sets the minimum price for a good or service.

Price floor is binding when it is set above minimum price.

If equilibrium price is $58 and the maximum price set by the government is $87. This is a price ceiling but it is not binding because it is above equilibrium price.

If the minimum price is $87. It is an example of A price floor and it is binding because it is set above equilibrium price.

If car rentals want to pay their workers more but can't do it because of new regulations, I it means it's a price ceiling and it is binding.

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