A Monopolist Has Set Her Level of Output to Maximize

question 88

Multiple Choice

A monopolist has set her level of output to maximize profit. The firm's marginal revenue is $20, and the price elasticity of demand is -2.0. The firm's profit maximizing price is approximately:

• A) $0
• B) $20
• C) $40
• D) $10
• E) This problem cannot be answered without knowing the marginal cost.