Which of the Following Is True of Price Ceilings

Multiple Choice

Which of the following is true of price ceilings?

A) Firms must charge the price established as a price ceiling.
B) A ceiling price below the free- market equilibrium price is not binding.
C) If the ceiling price is set above the free- market equilibrium price it will have no effect on the market.
D) With a non- binding ceiling price an excess demand for the product will develop.
E) With a binding ceiling price a surplus of the commodity will develop.