You are the manager of a monopoly. If the marginal cost of your product is $100 and the price elasticity of demand for your product is 3, then the markup of price over marginal cost you should set is equal to. (Round your answer to one decimal place.) (Round your answer to one decimal place.) If the price elasticity of demand is 6 rather than 3, the markup you should set is equal to Use your knowledge of the factors that affect the magnitude of the price elasticity of demand to explain the difference in the markups in your answers to the last two parts. OA. A smaller price elasticity of demand suggests that your good is a normal good, which allows you to set a higher markup. OB. A smaller price elasticity of demand suggests that there are many substitutes for your good, which allows you to set a higher markup. OC. A smaller price elasticity of demand suggests that there are few substitutes for a good, which allows you to set a higher markup. OD. A smaller price elasticity of demand suggests that your good is an inferior good, which allows you to set a higher markup.

You are the manager of a monopoly. If the marginal cost of your product is $100 and the price elasticity of demand for your product is 3, then the markup of price over marginal cost you should set is equal to. (Round your answer to one decimal place.) (Round your answer to one decimal place.) If the price elasticity of demand is 6 rather than 3, the markup you should set is equal to Use your knowledge of the factors that affect the magnitude of the price elasticity of demand to explain the difference in the markups in your answers to the last two parts. OA. A smaller price elasticity of demand suggests that your good is a normal good, which allows you to set a higher markup. OB. A smaller price elasticity of demand suggests that there are many substitutes for your good, which allows you to set a higher markup. OC. A smaller price elasticity of demand suggests that there are few substitutes for a good, which allows you to set a higher markup. OD. A smaller price elasticity of demand suggests that your good is an inferior good, which allows you to set a higher markup.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter9: Monopoly

Section: Chapter Questions

Problem 6SQ

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