3 Tutorials that teach Binding and Non-Binding
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Binding and Non-Binding

Binding and Non-Binding

Author: Dan Laub
This lesson covers the economics concepts of binding and non-binding.
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Introduction to Psychology

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Notes for "Binding and Non Binding"

Key Terms

Binding Constraint

Typically a regulatory constraint that pre-empts market equilibrium by setting different price level—price ceiling or price floor.

Non-binding Constraint

A pricing constraint that does not pre-empt market equilibrium.

Consumer Surplus

Determined by the difference between actual price paid for a good and the highest amount a consumer would have paid for the good.

Producer Surplus

The difference between actual payment for a good and the least amount a producer would have agreed to receive for the good.

Deadweight Loss

The change in total surplus (sum of producer and consumer surplus) that results from the imposition of a binding constraint.