Question
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
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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The Chinese Economy Transitions And Growth
Authors: Barry Naughton
1st Edition
0262640643, 9780262640640
