Question
A new fireworks company has moved into the empty warehouse across town. Assume Pyrotex Inc. estimates the demand for its fireworks to now be marginal.
A new fireworks company has moved into the empty warehouse across town. Assume Pyrotex Inc. estimates the demand for its fireworks to now be marginal. If the current price charged by Pyrotex is such that the demand of elasticity is unitary, which of the following statements is true?
Multiple Choice
- Pyrotex has a marginal revenue that is negative.
- Not enough information is provided to determine whether or not Pyrotex is currently maximizing its revenues.
- Pyrotex has a marginal revenue that is positive.
- Pyrotex has a marginal revenue of one.
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Microeconomics
Authors: Douglas Bernheim, Michael Whinston
2nd edition
73375853, 978-0073375854
