1 5 The demand curve Q A p, where A is a positive constant, has the property that the elasticity of demand is 1 If a monopoly faces this demand curve, where would it set its price or quantity if it has a positive marginal cost Explain Is this situation plausible ...

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1.5 The demand curve Q = A/p, where A is a positive constant, has the property that...

Question:

1.5 The demand curve Q = A/p, where A is a positive constant, has the property that the elasticity of demand is ε = -1. If a monopoly faces this demand curve, where would it set its price or quantity if it has a positive marginal cost? Explain. Is this situation plausible?

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