A monopolist firm faces a demand with constant elasticity of 2.0. It has a constant marginal cost

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A monopolist firm faces a demand with constant elasticity of 2.0. It has a constant marginal cost of $20 per unit and sets a price to maximize profit. If marginal cost should increase by 25%, would the price charged also rise by 25%?

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Microeconomics

ISBN: 978-0132857123

8th edition

Authors: Robert Pindyck, Daniel Rubinfeld

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Question Posted: Dec 22, 2015 02:26 AM

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A monopolist firm faces a demand with constant elasticity of 2.0. It has a constant marginal cost

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The monopolists pricing rule is or alternatively Therefor...View the full answer

Microeconomics

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