The manager of a local monopoly estimates that the elasticity of demand for its product is constant

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The manager of a local monopoly estimates that the elasticity of demand for its product is constant and equal to -3. The firm's marginal cost is constant at $20 per unit.

a. Express the firm's marginal revenue as a function of its price.

b. Determine the profit-maximizing price?

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Managerial Economics and Business Strategy

ISBN: 978-1259290619

9th edition

Authors: Michael Baye, Jeff Prince

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Question Posted: Nov 29, 2017 06:32 AM

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The manager of a local monopoly estimates that the elasticity of demand for its product is constant

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a Based on a price elasticity of demand of 4 the mo...View the full answer

Managerial Economics and Business Strategy

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