Monopolist faces downward sloping demand curve

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A profit maximizing monopolist faces a downward sloping demand curve with price elasticity of demand equal to -5. Based on this information we can infer that the monopolist will charge a price that is:

A) 25% higher than the marginal cost

B) 40% higher than the marginal cost

C) 25% lower than the marginal cost

D) 40% lower than the marginal cost

E) equal to the marginal cost

Reference no: EM131196646

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