The Inverse Elasticity Pricing Rule Says That the Optimal Markup

question 1

Multiple Choice

The inverse elasticity pricing rule says that the optimal markup of price over marginal cost expressed as a percentage of price

• A) is equal to ½ the inverse of the price elasticity of demand.
• B) is equal to - ½.
• C) is equal to the opposite of the inverse of the price elasticity of demand.
• D) is equal to the inverse of the price elasticity of demand.