To say that a price ceiling is binding is to say that the price ceiling

A) results in a surplus.
B) is set below the equilibrium price.
C) causes quantity supplied to exceed quantity demanded.
D) is set above the equilibrium price.

Binding Price Ceiling

A legal maximum price for a good or service that is set below the equilibrium price, resulting in shortages.

Equilibrium Price

The market price at which the quantity of a good demanded equals the quantity supplied, leading to market stability.

Surplus

An excess of supply over demand in a market, typically resulting in lower prices.