You are the manager of Happy Avocados, the dominant firm in the ready-made guacamole market. At your current production level, your marginal cost is $0.50 and you have estimated that your price elasticity of demand is 1.2. What price should you charge to maximize your profit? Select one: A. $6 B. $3 C. $0.50 D. $1.20

You are the manager of Happy Avocados, the dominant firm in the ready-made guacamole market. At your current production level, your marginal cost is $0.50 and you have estimated that your price elasticity of demand is 1.2. What price should you charge to maximize your profit? Select one: A. $6 B. $3 C. $0.50 D. $1.20

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 6.1IP

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