A Monopoly Incurs a Marginal Cost of $1 for Each

question 32

Multiple Choice

A monopoly incurs a marginal cost of $1 for each unit produced.If the price elasticity of demand equals -2.0,the monopoly maximizes profit by charging a price of

• A)$1.
• B)$1.50.
• C)$2.
• D)$3.

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