Business, 17.09.2019 22:40 kenz309

At work, no one can find the digital version of a 20-page document that needs to be revised. you save the day by using a scanner and software to digitize the paper document.

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Aprice ceiling is â€śbindingâ€ť if the price ceiling is set below the equilibrium price. suppose that the equilibrium price is $5. if a price ceiling is set at $6, this will not affect the market in any way since $5 remains a legally allowable price (since $5 < $6). a price ceiling of $6 is called a â€śnon-bindingâ€ť price ceiling. on the other hand, if the price ceiling is set at $4, the price ceiling is â€śbindingâ€ť because the natural equilibrium price is $5 but that is no longer allowed. what happens when there is a binding price ceiling? at a price below the equilibrium price, quantity demanded exceeds quantity supplied. there is a shortage. normally, price increases eliminate shortages by increasing quantity supplied and decreasing quantity demanded. in this case, however, price increases are not allowed past the price ceiling. we therefore predict that the observed market price will be right at the price ceiling and there will be a permanent shortage. the observed quantity bought and sold will be dictated by the quantity supplied at the price ceiling. although consumers would like to buy more, there are no more units for sale

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