Suppose that a monopolist has costs given by TC(q ) = 10q and faces a market demand curve of Q = 1,000 - 50P. a) What is the elasticity of demand in the monopoly equilibrium (remember that the elasticity of demand is a negative number as long as the law of demand holds true)? Briefly interpret the elasticity of demand that you found in a sentence.

Suppose that a monopolist has costs given by TC(q ) = 10q and faces a market demand curve of Q = 1,000 - 50P. a) What is the elasticity of demand in the monopoly equilibrium (remember that the elasticity of demand is a negative number as long as the law of demand holds true)? Briefly interpret the elasticity of demand that you found in a sentence.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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