The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of milk is $3.50 per gallon.
Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding.
Statement
Price Control
Binding or Not
The government prohibits grocery stores from selling milk for more than $3.90 per gallon.
The government has instituted a legal minimum price of $3.00 per gallon for milk.
There are many teenagers who would like to work at grocery stores, but they are not hired due to minimum-wage laws.