Suppose the government has imposed a price ceiling on laptop computers. Which of the following events could transform the price ceiling from one that is not binding into one that is binding?

A Improvements in production technology reduce the costs of producing laptop computers Correct Incorrect

B The number of firms selling laptop computer decreases Correct Incorrect

C Consumers’ income decreases and laptop computers are a normal good Correct Incorrect

D The number of consumers buying laptop computers decreases Correct Incorrect

Detailed Solution

The number of firms selling laptop computer decreases, supply curve shifts leftward resulting in a shortage and price ceiling becomes binding

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