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If a price ceiling of P = $9 is imposed, marginal revenue (MR) can increase even though the price is lower due to quantity effects.
If a price ceiling of P = $9 is imposed, marginal revenue (MR) can increase even though the price is lower due to quantity effects. Under the price ceiling, the firm can only charge a maximum of $9 per unit, but as it increases its output, it sells more units, leading to an increase in total revenue
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Using Econometrics A Practical Guide
Authors: A. H. Studenmund
7th edition
013418274X, 978-0134182742
