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16 February, 05:56

The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of milk is $3.50 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 Price Control Binding or nonbinding.

Statement

1. The government has instituted a legal minimum price of $3.90 per gallon for milk.

2. There are many teenagers who would like to work at grocery stores, but they are not hired due to minimum-wage laws.

3. The government prohibits grocery stores from selling milk for more than $3.90 per gallon.

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  1. 16 February, 06:24
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    The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of milk is $3.50 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 Price Control Binding or nonbinding.

    The government prohibits grocery stores from selling milk for more than $3.90 per gallon

    Explanation:

    The price control has to do with total decision in making price tag such as the government prohibits grocery stores from selling milk for more than $3.90 per gallon. This reflects that only government has sole decision on the price and makes them the price control.
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