This article examines the short-run effects of Abba Lerner and David Co-lander's Market Anti-Inflation Plan (MAP) with a microeconomic model of
firm pricing and output. It proves that MAP assures a constant (Paasche)price
level. For an economy in which all firms face downward-sloping demand,
MAP increases output, as MAP acts as an economywide Ramsey pricing
scheme, reducing firms' monopoly power. Perfectly competitive industries have
reduced supply elasticity, which can either increase or reduce their output.
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