If a monopoly is operating on the demand curve where price elasticity is equal to -3,and MR equals 2,then price is equal to
A)3.
B)2.
C)1.
D)0.

Question

Quizplus · Accepted Answer

Given that the price elasticity of demand (PED) is -3 and marginal revenue (MR) is 2, we can use the formula MR = P(1 + 1/PED) to find the price (P). Rearranging the formula to solve for P gives P = MR / (1 + 1/PED). Substituting the given values (MR = 2, PED = -3) into the formula yields P = 2 / (1 + 1/-3) = 2 / (1 - 1/3) = 2 / (2/3) = 3.

If a Monopoly Is Operating on the Demand Curve Where