If the marginal cost to make a good is $20 and the price elasticity of demand is -6 what price should be charged via the optimal markup rule?
Enter as a value.
The formula for calculating the optimal markup pricing is
= P=MC*(E/1+E)
E = -6
MC = 20
P = 20*(-6/1-6)
= 20*6/5
= 24
If the marginal cost to make a good is $20 and the price elasticity of demand...