When There Is a Binding Price Ceiling

question 40

Multiple Choice

When there is a binding price ceiling,

• A)there is no equilibrium.
• B)the quantity demanded does not equal the quantity supplied.
• C)all potential customers are happy because they can buy the good at a lower price.
• D)producers move production to another country.

Analyze the relationship between price, total revenue, and marginal revenue in monopolistic markets.

Determine the impact of price changes on marginal revenue.

Identify conditions under which marginal revenue is positive, negative, or zero.

Calculate the marginal revenue for given levels of output.