Silverscreen Movie Rentals has market power in the previously viewed video sales market. The demand curve for Silverscreen movies is QD = 10 - 0.4P P = 25 - 2.5Q. Silverscreen's marginal revenue function is MR(Q) = 25 - 5Q. Silverscreen's marginal cost curve is MC(Q) = 0.53 + 0.026Q. Determine Silverscreen's profit maximizing price. Calculate Silverscreen's elasticity of demand at this price. What is Silverscreen's mark-up over marginal cost as a percentage of price?
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