Answer Happy

1. The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of milk is $2.50 per gallon. 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 Price Control Binding or Not Binding The government prohibits grocery stores from selling milk for more than $2.30 per gallon. Due to new regulations, grocery stores that would like to pay better wages in order to hire more workers are prohibited from doing so. The government has instituted a legal minimum price of $3.00 per gallon for milk. Price ceiling