The profit-maximizing price is $ (Round your answer to the nearest penny.)

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter14: Monopoly
Section: Chapter Questions
Problem 14.3P
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A firm in the market for designer jeans has some degree of monopoly power. The demand curve it faces has a price elasticity of demand of -3, while the price elasticity demand of
the market is - 2. Moreover, the firm has a constant marginal cost of $35.00. Using the rule of thumb for pricing, calculate the firm's profit-maximizing price.
The profit-maximizing price is $
(Round your answer to the nearest penny.)
Transcribed Image Text:A firm in the market for designer jeans has some degree of monopoly power. The demand curve it faces has a price elasticity of demand of -3, while the price elasticity demand of the market is - 2. Moreover, the firm has a constant marginal cost of $35.00. Using the rule of thumb for pricing, calculate the firm's profit-maximizing price. The profit-maximizing price is $ (Round your answer to the nearest penny.)
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