Mark-up formula:
(P - MC) / P = -(1/Ed)
Where MC is marginal cost
P is price
Ed is elasticity of demand.
(10) (P - MC) / P = -(1/Ed)
(P - 24) / P = -(1 / -2)
(P - 24) / P = 0.5
(P-24) = 0.5P
P - 0.5P = 24
0.5P = 24
P = 24 / 0.5
P = 48
Profit maximizing price is $48.
(11) (P - MC) / P = -(1/Ed)
(36 - MC) / 36 = -(1/ -3)
(36 - MC) = 36 / 3
36 - MC = 12
MC = 36 - 12
MC = 24.
Marginal cost per unit is $24.
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