Notes on "Binding and Non-Binding"
Typically a regulatory constraint that pre-empts market
equilibrium by setting different price level—price ceiling or price floor.
A pricing constraint that does not pre-empt market
Determined by the difference between actual price paid for a
good and the highest amount a consumer would have paid for the good.
The difference between actual payment for a good and the
least amount a producer would have agreed to receive for the good.
The change in total surplus (sum of producer and consumer
surplus) that results from the imposition of a binding constraint.