Question

WHICH OF THE FOLLOWING WILL CAUSE NO CHANGE IN PRODUCER SURPLUS? A) IMPOSITION OF A NON BINDING PRICE CEILING IN THE MARKET. B) BUYERS EXPECT THE PRICE OF GOODS TO BE HIGHER NEXT MONTH. C) PRICE OF SUBSTITUTE INCEASES. D) INCOME INCREASES AND BUYERS CONSIDER THE GOODS TO BE INFERIOR.

Answer 1

The answer is A. Imposition of a non binding price ceiling in the market

Price Ceiling is when a government impose a price limit over a specific product

Non-Binding Price ceiling is if that price limit that imposed to the product is still higher than market equilibrium , which won't do anything to producer's surplus