Span classnews_dtmar 13 2011spannbsp018332lets say the equilibrium is 3 and the price ceiling is 2 because the price ceiling is below the equilibrium price of 3 the market price equals 2 more people would want to buy more of the product since it is cheaper thus making the supply of computers decrease since the quantity demanded is greater than the quantity supplied in a binding price ceiling then that would result in.
Note that the price ceiling is above the equilibrium price so that anything price below the ceiling is feasible another way to think about this is to start at a price of 0 and go up until you the price ceiling price or the equilibrium price if you hit the price ceiling first it is binding.
Span classnews_dtaug 31 2011spannbsp018332for example the equilibrium price of orange juice is 13 due to the fact that the price is rising rapidly the government decides to impose a price ceiling of 15 from the demandsupply graph there should be an excess in supply as quantity supplied is more the quantity demanded.
Span classnews_dtjul 22 2010spannbsp018332a nonbinding ceiling implies that it is set too high to matter prices move towards equilibrium price a ceiling or maximum set above pe wont matter and thus be nonbinding because price will never approach that maximum.
Span classnews_dtsep 29 2011spannbsp018332best answer d 180 is below the equilibrium price therefore a legal maximum of 180 is a binding price ceiling and will produce a shortage of gasoline 4 is above the equilibrium price it will not affect anything therefore it is a nonbinding price ceiling.