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A Monopolist Has Set Her Level of Output to Maximize

Question 88

Multiple Choice

A monopolist has set her level of output to maximize profit. The firm's marginal revenue is $20, and the price elasticity of demand is -2.0. The firm's profit maximizing price is approximately:


A) $0
B) $20
C) $40
D) $10
E) This problem cannot be answered without knowing the marginal cost.

Correct Answer:

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