Problem
|
Price
|
Quantity Demanded
|
Quantity Supplied
|
|
$28
|
320
|
380
|
|
$26
|
340
|
370
|
|
$24
|
360
|
360
|
|
$22
|
380
|
350
|
|
$20
|
400
|
340
|
Use the table of information. Which of the following statements is (are) correct?
1. If the government set a price ceiling of $28, the market would not be affected because the ceiling would be non price floor of $28 would cause a surplus of 60 units in this market.
2. A price ceiling of $24 is non-binding because it would not have any effect on the market since quantity demanded equals quantity supplied at that price.
3. Suppose government set a price ceiling of $24. If demand increased in this market, the nonbinding price ceiling would become binding and the market would find a method other than price to ration the good to buyers.