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Suppose that instead of imposing the per-unit sales tax, the government sets a price ceiling of $7.
Identify the quantity of soft drinks that will be exchanged in the market as a result of the price ceiling.
Explain

Sagot :

Parrain

If the government decides to impose a price ceiling of $7, the result would be that 5 million cases would be exchanged.

Effect of Price Ceilings

A price ceiling will have no effect on goods supplied if it is not binding. A non-binding price ceiling is one that is above the equilibrium price.

The price ceiling of $7 is above the equilibrium price of $5 which means that it is non-binding.

This means that the units supplied will not change from the equilibrium quantity of 5 million cases.

Find out more on price ceilings at https://brainly.com/question/1448982.

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