If the Profit-Maximizing Markup Price Is Marginal Cost Times 2,the

question 35

Multiple Choice

If the profit-maximizing markup price is marginal cost times 2,the elasticity of demand must be:

• A) -0.
• B) -1/2.
• C) -1.
• D) -4/3.
• E) -2.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and manufacturing overhead.

Markdown

A reduction in the selling price of goods, often used as a strategy to clear inventory or stimulate sales.

Net Margin

A profitability metric calculated as net income divided by revenue, expressed as a percentage, indicating the percentage of revenue that translates into profit.

Full Selling Price

The total cost to the consumer to purchase a product or service, including any taxes, fees, or additional charges.