QUESTION 7 What will be the effect of a binding price ceilin

QUESTION 7 What will be the effect of a binding price ceiling? a. A surplus will be created O D. A shortage will be created O C. There will be no effect The effect is unknown QUESTION 8 t is one unintended consequence of rent conirol a. People in rent-controlled units will relocate more oft

Solution

Ans:

Option B

A shortage will be created

Price ceiling is the maximum price that can be charged.A price ceiling is binding if it is set below the equilibrium price.A binding price ceiling decreases supply, causing a shortage.