Business College

Consider again the price control described in the last question. Let's assume that the price control
was binding
Now people vote to repeal the law and remove the price control. As the market adjusts afterward,
we'd expect to see quantity demanded [Select ]
- and quantity supplied
in the market for wheat.
[Select ]
fall
remain constant
rise

Answers

Answer 1

If it is a binding price floor, when the law is repealed, quantity demanded increases and quantity supplied decreases.

If it is a binding price ceiling, when the law is repealed, quantity demanded decreases and quantity supplied increases.

What is a price floor and a price ceiling?

A price floor is when the government sets the minimum price of a product. A price floor is binding if it is set above equilibrium price.

Price ceiling is when the government sets the maximum price for a product. It is binding when it is set below equilibrium price.

To learn more about price floor, please check: https://brainly.com/question/26551616

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