Questions: Suppose a price ceiling is imposed on grapes above their equilibrium price. The likely result will be: none of the above no result the price ceiling is not binding a significant change in quantity a significant change in price

Suppose a price ceiling is imposed on grapes above their equilibrium price. The likely result will be: none of the above no result the price ceiling is not binding a significant change in quantity a significant change in price
Transcript text: Suppose a price ceiling is imposed on grapes above their equilibrium price. The likely result will be: none of the above no result the price ceiling is not binding a significant change in quantity a significant change in price
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Solution

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The answer is B: no result the price ceiling is not binding.

Explanation for each option:

A. None of the above: This option is incorrect because one of the provided options accurately describes the situation.

B. No result the price ceiling is not binding: This is the correct answer. A price ceiling set above the equilibrium price is not binding, meaning it has no effect on the market. The equilibrium price is the price at which the quantity of grapes demanded equals the quantity supplied. Since the price ceiling is above this equilibrium, the market can continue to operate at the equilibrium price without any interference from the ceiling.

C. A significant change in quantity: This option is incorrect. Since the price ceiling is not binding, there will be no change in the quantity of grapes supplied or demanded.

D. A significant change in price: This option is incorrect. The price ceiling does not affect the market price because it is set above the equilibrium price, so there will be no change in price.

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