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.

Question

Quizplus · Accepted Answer

The Answer of 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.

A Monopolist Faces a Constant Marginal Cost of $1 Per