the profit of the firm
Not what you're looking for?
ABC, Inc. produces an output that corresponds to minimum average cost which is $50.00. The firm wishes to adopt a 50% mark-up on unit cost. A recent study indicates that the price elasticity of demand is about -2.5 for ABC, Inc's producut. Will this pricing decision maximize the firm's profits? (Show your work).
Purchase this Solution
Solution Summary
This solution examines the profit of the firm.
Solution Preview
The firm's profit = Total revenue - Total cost
Total Revenue = price x quantity
As price elasticity of demand is - 2.5, this implies ...
Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.