3. Suppose a firm has a constant marginal cost of $10. The current price of the product...

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3. Suppose a firm has a constant marginal cost of

$10. The current price of the product is $25, and at that price, it is estimated that the price elasticity of demand is −3.0.

a. Is the firm charging the optimal price for the product? Demonstrate how you know.

b. Should the price be changed? If so, how?

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Economics For Managers

ISBN: 9781292060095

3rd Global Edition

Authors: Paul Farnham

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Question Posted: Nov 13, 2024 08:01 AM

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3. Suppose a firm has a constant marginal cost of $10. The current price of the product...

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