True or false: a price ceiling above $25 per box is a binding price ceiling in this market. (economists call a price ceiling that prevents the market from reaching equilibrium a binding price ceiling.)

A price ceiling is a price that is set in order to stop the market fro, reaching equilibrium pricing. To make sure that it does not reach equilibirum pricing, the pricing for the the good is set below. If the price ceiling is $25, then anything below $25 would be a binding price on the good.

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Tundexi Tundexi · Answer 2 · 2021-09-15T18:33:16+02:00

False, the price ceiling above $25 per box is not a binding price ceiling in this market.

Let understand that "equilibrium level" is point at which the market supply and demand balance each other and thus, making prices stable.

Let understand that "price ceiling" is the maximum amount a seller must charge for a product and are made mandatory by the government.

Let understand that "binding price ceiling" is when a maximum amount is mandated to be charged on a good, usually at a price below equilibrium and these are mandated by the government.

In conclusion, the buyers are at advantage because they buy good at a lower price than normal while the sellers suffers the loss.

Learn more binding price ceiling here

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