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Monopoly pricing formula using demand elasticity

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Reference no: EM132084252

A monopoly incurs a marginal cost of $3 for each unit produced. If the price elasticity of demand equals -2.5, the monopoly maximizes profit by charging a price of

Hint: Numbers have been revised, must perform calculation in order to get the correct answer. Recall the Monopoly Pricing formula using Demand Elasticity and use it to price.

A.$5.00.

B.$3.00.

C.$4.00.

D.$5.50.

Reference no: EM132084252

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