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You are the manager of a monopoly. Answer the following questions. 1. You know that the marginal cost of production is $100 and the price

You are the manager of a monopoly. Answer the following questions.

1. You know that the marginal cost of production is $100 and the price elasticity of demand for your product is -2. What is the profit-maximizing markup over marginal cost?

2. If the demand for your product became more elastic, would your markup increase or decrease? Why?

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