At the profit-maximizing output the price of Tommy jeans is twice as high as marginal cost. What is the elasticity of demand?
Answer to relevant QuestionsWhy will Disneyland never set its admission price at a level where its demand curve is inelastic? Use the total revenue and total cost curves to illustrate your answer.Explain the determinants of a firm’s monopoly power. How can a firm have monopoly power if it is not the sole supplier of a product?Assume that the marginal cost to a grocery of selling a bottle of salad dressing to customers who use coupons versus those who don’t is identical and equal to $ 1.50. If the elasticity of demand of coupon users is 5 versus ...Starting from the Cournot equilibrium in Figure, suppose that the marginal and average total cost curves (which are the same for both firms) shift downward. Explain how the firms adjust to a new Cournot equilibrium.It is the not-too-distant future and all important human needs have been eliminated. Thanks to the firm Bioeconotek, a miracle drug, Needless, has been invented that genetically suppresses a patient’s desire to think in ...
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