If a price ceiling is not binding, then:
a. there will be a surplus in the market.
b. there will be a shortage in the market.
c. the market will be less efficient than it would be without the price ceiling.
d. there will be no effect on the market price or quantity sold.
- The correct option is a. There will be a surplus in the market.
In microeconomics, the term equilibrium can be defined as the market-clearing level for a market. This level is determined by the interaction between market demand and supply curves.