question archive Assume two firms exist in the market, Buckley, and Stetler

Assume two firms exist in the market, Buckley, and Stetler

Subject:EconomicsPrice:2.88 Bought3

Assume two firms exist in the market, Buckley, and Stetler. If they merge, they will have fixed costs of $140,000, marginal costs of $50, and a market share of 6 percent. The price elasticity of demand for clinic services is -0.22. Assume the volume of patients at the profit-maximizing price is 24,600. The merged firm's estimated price elasticity of demand is:

a. -0.3667

b. -36.667

c. -6

d. -3.667

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