Suppose You Live in a Community with No Price Controls

Multiple Choice

Suppose you live in a community with no price controls.What do you expect will happen if your town borders a community where there is a binding price ceiling on most products?

A) Prices in the legal market in the community with a binding price ceiling will rise.
B) Prices in the legal market in the community with a binding price ceiling will fall.
C) There will be shortages in the community with a binding price ceiling.
D) More consumers will purchase the product in the community with the price ceiling.
E) The black market in your community will be larger than the black market in the community with the binding price ceiling.