Aprice ceiling is binding when it is set a. above the equilibrium price, causing a shortage. b. below the equilibrium price, causing a surplus. c. above the equilibrium price, causing a surplus.

below equilibrium price, causing a shortage.

Explanation:

In market economies, the equilibrium price of goods and services is determined through the interaction between supply and demand. The price ceiling is a form of competitive market intervention in which the government sets a maximum price below the equilibrium price. Thus, producers tend to decrease their supply for the product as the profit perspective decreases. As a result, product shortages may occur. For example, if the equilibrium price of the sack of corn is $ 20 if the government sets a price ceiling of $ 15, corn growers can only sell it for $ 15. As a result, corn production and supply tend to decrease.

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.