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A firm faces a demand curve of p = 11-Q and has a marginal cost of $6 per unit. A regulatory agency imposes a price
- A firm faces a demand curve of p = 11-Q and has a marginal cost of $6 per unit. A regulatory agency imposes a price ceiling of $7. Find the optimal price and compare it to the price the firm would have charged if there was no price ceiling. What is the highest level of output that can be achieved if a regulator were free to choose a price ceiling?
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Macroeconomics
Authors: Robert J Gordon
12th edition
138014914, 978-0138014919
