Question

Why are binding price ceiling laws passed?

A. They make goods more expensive (and profitable) for firms.

B. They encourage sellers to produce more of a good.

C. They encourage producers to sell higher-quality products.

D. They permit customers to obtain higher-quality products.

E. They make a good less expensive for those customers who are able to purchase the good in the legal market.

E?

Answer 1

Solution: they make the good less expensive for those customers who are able to purchase the good in the legal market

Explanation: When the government sets a required price on a good at a price below equilibrium is called binding price ceiling. As the government requires that prices not increases above this price, that price binds the market for that good. Because of the binding price ceiling law the good becomes less expensive for those customers who are able to purchase the good in the legal market