Firms X and firm Y are maximizing profits. At their respective profit-maximizing price, Firm X's own-price elasticity is -2 and Firm Y's own-price elasticity is -3.Which statement is correct?O The share of markup in the optimal price (Lerner index) for firm X is equal to 50%O Firm X is a price takerO Everything else held constant, if firm Y increases its price it will lead to an increase in its revenueO Firm X's consumers are more price sensitive than firm Y's consumersO Firm Y can charge a higher markup than firm X

Elasticity of demand depicts how much consumer responds with the change in the price level.

Firms X and firm Y are maximizing profits. At their respective profit-maximizing price, Firm X's own-price elasticity is -2 and Firm Y's own-price elasticity is -3. Which statement is correct? O The share of markup in the optimal price (Lerner inden) for firm X is equal to 50% O Firm X is a price taker O Everything else held constant, itf firm Y increases its price it will lead to an increase in its revenue O Firm X's consumers are more price sensitive than firm Y's consumers O Firm Y can charge a higher markup than firm X

Firms X and firm Y are maximizing profits. At their respective profit-maximizing price, Firm X's own-price elasticity is -2 and Firm Y's own-price elasticity is -3. Which statement is correct? O The share of markup in the optimal price (Lerner inden) for firm X is equal to 50% O Firm X is a price taker O Everything else held constant, itf firm Y increases its price it will lead to an increase in its revenue O Firm X's consumers are more price sensitive than firm Y's consumers O Firm Y can charge a higher markup than firm X

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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