4. The ratio between price and marginal cost p/MC is largest when demand is very elastic at the price that maximizes the monopolist’s profits. Hint: very elastic demand = the elasticity is negative number that is large in magnitude.(a) True. (b) False.

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter9: Monopoly
Section: Chapter Questions
Problem 33P: Draw a monopolists demand curve, marginal revenue, and marginal cost curves. Identify the...
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4. The ratio between price and marginal cost p/MC is largest when demand is very elastic at the price that maximizes the monopolist’s profits. Hint: very elastic demand = the elasticity is negative number that is large in magnitude.
(a) True. (b) False.

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