Multiple Choice
During the height of the pet rock craze in the 1970s, the price elasticity of demand was estimated to be 1.20.Since pet rocks have a marginal cost of zero, a profit-maximizing seller of pet rocks would
A) leave prices unchanged.
B) need more-detailed market information before making any pricing changes.
C) decrease prices.
D) increase prices.
E) diversify into selling Karen Carpenter LPs.
Correct Answer:
Verified
Correct Answer:
Verified
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