A monopolist faces a constant marginal cost of $1 per unit and has no fixed costs. If the price elasticity of demand for this product is constant and equal to -3, then
A) to maximize profits, he should charge a price of $1.50.
B) to maximize profits, he should charge a price of $3.
C) to maximize profits, he should charge a price of $1.33.
D) he is not maximizing profits.
E) None of the above.
Correct Answer:
Verified
Q42: The demand for Professor Bongmore's new book
Q43: The demand for Professor Bongmore's new book
Q44: An industry has two firms, a leader
Q45: In a market with the inverse demand
Q46: A profit-maximizing monopolist has the cost schedule
Q48: Peter Morgan sells pigeon pies from his
Q48: A certain monopolist has a positive marginal
Q49: A profit-maximizing monopolist has the cost schedule
Q50: A firm has invented a new beverage
Q52: Charlie can work as many hours as
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents