Suppose that a firm is selling a good with a marginal cost of $35. Management estimates...

Question

Question

Suppose that a firm is selling a good with a marginal cost of $35. Management estimates demand elasticity to be –2. What is the appropriate price to set in order to maximize profit?

Answer 1

Answer #1

MC = 35 - 9 Ed -2 Laner 3 Monopoly Iudex of =P-MC = 1 P-35 = 1 e ral 2 (P-35) =P 2P-70 =P ap-P = 20 p =20 profitao maximize p

Answer 2

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