Monopoly faces demand curve with price elasticity

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1. At the current level of? production, a monopoly faces a demand curve with a price elasticity of 0.8. This means it should? __________

A. Decrease production and lower prices.

B. Increase production and raise prices.

C. Decrease production and raise prices.

D. More information is necessary to answer this question.

E. Increase production and lower prices.

2. Consider a model where we attempt to evaluate the effect of certain variables on the price of sex services. Suppose that the estimated coefficient on the variable "age"equals 1.25 and the estimated coefficient on the variable "age2" equals -0.028. What is the "turning point" on the age variable? Round to the nearest year.

Reference no: EM131393452

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