For a profit maximizing monopolist,if the MC = 10 and price is set to be 20,then the elasticity at this price is

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For a profit-maximizing monopolist, the optimal price and quantity occur where marginal revenue (MR) equals marginal cost (MC). According to the formula for the price elasticity of demand (PED) at the profit-maximizing quantity, PED = 1 + (MR/P). Given that MC = MR = 10 and the price is 20, substituting these values into the formula gives PED = 1 + (10/20) = 1.5. However, since elasticity is negative for downward-sloping demand curves, the correct elasticity is -1.5. However, this specific option is not provided, indicating a mistake in my calculation based on the provided options. The correct approach for a monopolist setting a price of 20 with a marginal cost of 10 involves the markup rule, which relates the price elasticity of demand to the markup over marginal cost. The correct formula in this context should be P = MC / (1 + (1/elasticity)), but without the specific details on how the options were derived, there's a misunderstanding in the application. Given the options and the typical relationship between price, marginal cost, and elasticity for a monopolist, the closest match to standard economic theory would be an elasticity of -2, implying a significant markup over marginal cost and a relatively elastic demand at the chosen price point. However, this explanation reveals a mistake in the initial calculation and interpretation based on the provided options, as the correct method to determine elasticity directly from the given information was not accurately followed. The correct answer should be based on the relationship that for a profit-maximizing monopolist, the price elasticity of demand is negative and the formula MR = MC is applied, where MR can also be expressed in terms of elasticity and price, leading to the conclusion that at the profit-maximizing price, the demand must be elastic. Given the options and typical economic principles, without a direct calculation provided in the options, the intended answer might be inferred rather than directly calculated from the given information.

For a Profit Maximizing Monopolist,if the MC = 10 and Price