Question

5. Suppose that a firm has marginal costs of $20, and the firm faces an own-price elasticity of demand of −3.25. In this market, firms maximize profit at a price of ________ and have a Lerner index of ________. A. $26.15; 0.31 B. $29.00; 0.45 C. $33.86; 0.31 D. $36.15; 0.45

Answer 1