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I would appreciate your reply to solve an economics problem. For a firm that is maximizing...

I would appreciate your reply to solve an economics problem. For a firm that is maximizing profit, if the price elasticity of demand is -1.7 and price is $10. Then marginal cost should be approximately _____. Hint: Put round your answer to the second decimal place.

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Answer #1

Answer

by markup formula

MC=P(1+(1/e))

MC=marginal cost

P=price

e=elastcity

MC=10*(1+1/(-1.7))

=4.11764706

the marginal cost is apporximatly $4.12

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