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Assume two firms exist in the market, Buckley and Stetler. If they merge, they will have fixed costs of $140,000, marginal costs of $50, and
Assume two firms exist in the market, Buckley and Stetler. If they merge, they will have fixed costs of $140,000, marginal costs of $50, and a market share of 6 percent. The price elasticity of demand for clinic services is -0.22. Assume the volume of patients at the profit-maximizing price is 24,600. The merged firm's profit-maximizing price is
Select one:
a.
$13.75
b.
$50
c.
$183.35
d.
$68.75
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