Suppose That the Elasticity of Demand at a Competitive Equilibrium

question 32

Multiple Choice

Suppose that the elasticity of demand at a competitive equilibrium is 2.50.If the price under
Monopoly is 10 percent higher than under perfect competition,assuming identical cost curves,one can conclude that the monopoly output is _____ percent below of the competitive output.

• A)25
• B)40
• C)2.5
• D)4