Which of the following is an example of a binding price control? This is a "multiple answer" question, so there may be more than one correct answer

a. The price of steel is $300 per ton. The government imposes a price floor of $200 per ton.

b. The price of cotton is $10 per bale. The government imposes a price floor of $15 per bale.

c. The price of gasoline is $2 per gallon. The government imposes a price ceiling of $4 per gallon.

d. The price of bananas is $2 per pound. The government imposes a price ceiling at $1 per pound.

e. The price of wheat is $20 per bushel. The government imposes a price floor of $5 per bushel

f. The price of mobile phone data is around $15 per gigabyte per month. The government imposes a price ceiling of $5 per month.

The correct answer is: option b, option d, option f.

Explanation:

Price control can be defined as the limit on the price set by the government. A price floor refers to the lower limit on the price of a product. A binding floor refers to the price floor which is set above the equilibrium price level.

A price ceiling refers to the upper limit fixed on the price of a product. A producer cannot charge more than this price. A binding price ceiling is fixed below the equilibrium level of the price.

The price floor of $15 on cotton is binding as it is above the equilibrium level.

The price ceiling of $1 per pond on bananas is binding as it is fixed below the equilibrium level.

The price ceiling of $5 per month on mobile phone data is binding as it fixed below the equilibrium level.