Question

In one version of the experiment, the professor plans to put a ceiling of $11 on prices. That is, no one will be permitted to submit a bid or an asking price greater than $11. Will this be a binding price ceiling? That is, will the price ceiling affect the prices that buyers and sellers agree to when they trade?

Answer 1

Answer:

no

Explanation:

given data

ceiling = $11

solution

we know here professor is planing put  ceiling = $11 on prices

but no one is permitted submit bid greater than of $11

so we know at price = $11 most of the consumer will be able to buy product

and market actually clear at $10

so cost to producer fall below = $11

hence the price ceiling at $11 here it will not be binding