In a monopoly where the marginal revenue and price are,respectively,given by $0.50 and $2,the price elasticity of demand is:
A) −0.75.
B) −1
C) −5/4
D) −4/3.

Question

Quizplus · Accepted Answer

The price elasticity of demand (E) in a monopoly can be calculated using the formula: E = (P/MR) - 1. Substituting the given values, E = (2/0.5) - 1 = 4 - 1 = 3. Since elasticity is negative for a downward-sloping demand curve, the correct answer is -4/3.

In a Monopoly Where the Marginal Revenue and Price Are,respectively,given