1. The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of beer is $5.00 per pint. 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 The government has instituted a legal minimum price of $10.00 per pint for beer. Due to new regulations, breweries that would like to pay better wages in order to hire more workers are prohibited from doing so. The government prohibits breweries from selling beer for more than $10.00 per pint. Price Control Price floor Price floor Price ceiling Binding or Not Binding Binding Non-binding ▼
1. The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of beer is $5.00 per pint. 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 The government has instituted a legal minimum price of $10.00 per pint for beer. Due to new regulations, breweries that would like to pay better wages in order to hire more workers are prohibited from doing so. The government prohibits breweries from selling beer for more than $10.00 per pint. Price Control Price floor Price floor Price ceiling Binding or Not Binding Binding Non-binding ▼
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter3: Demand And Supply
Section: Chapter Questions
Problem 57P: A low-income county decides to set a price ceiling on bread so it can make sure that bread is...
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