Given the price elasticity of demand for your product is 0.85, your marginal cost is 50 when you produce 1000 units, use the Lerner Index to calculate your price mark-up. What is your optimal price if you produce 1000 units?© BrainMass Inc. brainmass.com March 5, 2021, 12:10 am ad1c9bdddf
The key formulas to solve this question are
L = (P - MC)/P
L = 1/E (or L = -1/E if you express ...
The optimal price given price elasticity demand is calculated.