suppose a price ceiling is imposed at $1.20 on the market above. the price would be
suppose a price ceiling is imposed at $1.20 on the market above. the price would be
Answer
Explanation:
Step1: Understand price - ceiling concept
A price - ceiling is a legal maximum price. If the price - ceiling is set below the equilibrium price, it is binding and the market price will be the price - ceiling price. If it is set above the equilibrium price, it is non - binding and the market price will be the equilibrium price.
Step2: Analyze given price - ceiling
The price - ceiling is set at $1.20. Since it is a price - ceiling, the highest price that can be charged in the market is $1.20.
Answer:
$1.20