question archive The manager of a local monopoly estimates that the elasticity of demand for its product is constant and equal to -3
The manager of a local monopoly estimates that the elasticity of demand for its product is constant and equal to -3
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The manager of a local monopoly estimates that the elasticity of demand for its product is constant and equal to -3. The firm's marginal cost is constant at $30 per unit. What is the firm's marginal revenue?
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The firm's marginal revenue is equal to $30$30 per unit.
A monopoly firm maximizes profit where marginal revenue equals marginal costs. Given this firm is a monopoly and its marginal costs are $30$30 per unit we know that its marginal revenue is also $30$30 per unit.
