Question

Which of the following would not interfere with market equilibria? a. a non-binding price floor b. a binding price ceiling c. a minimum wage d. a rent contro

Answer 1

Answer:

A) a non-binding price floor

Explanation:

A non-binding price floor is a price floor set below the current equilibrium price, so it really doesn't affect either the supply or demand of the product.

A binding price ceiling will result in a shortage since it decreases quantity supplied and increases quantity demanded. Rent control is a type of binding price ceiling. A minimum wage is a type of binding price floor which results in labor supply surplus since the quantity of labor supplied will increase but the quantity of labor demanded will decrease.