A monopolist has set her level of output to maximize profit. The firm’
A monopolist has set her level of output to maximize profit. The firm’s marginal revenue is $20, and the price elasticity of demand is -2.0. The firm’s profit maximizing price is approximately:
A) $0
B) $20
C) $40
D) $10
E) This problem cannot be answered without knowing the marginal cost.
ANSWER
C
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