Jenny sells lemonade in front of her house in the summer. Several other kids in Jenny's neighborhood also run lemonade stands in the summer. If the lemonade market is perfectly competitive and price is already at the equilibrium level, Jenny can increase her revenue if she:

Question

Quizplus · Accepted Answer

Since the lemonade market is perfectly competitive and price is already at the equilibrium level, Jenny cannot increase the price of her lemonade without losing customers to other lemonade stands. However, by increasing her output, she can increase her revenue without affecting the price of her lemonade. This is because the demand for lemonade in the summer is relatively elastic, meaning that a small increase in output will result in a larger increase in revenue. Therefore, option D is the best choice.

Jenny Sells Lemonade in Front of Her House in the Summer