The price elasticity of demand for Rosie's Roses fresh flowers the week of Valentine's Day is 1.10 and is 1.60 other days of the year. If Rosie's Roses faces a constant marginal cost of $0.75 per rose, what is the profit-maximizing peak-load price to charge the week of Valentine's Day?
A) $8.25 B) $2.00 C) $6.50 D) $11.00
A) $8.25
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If a perfectly competitive firm is producing an output level for which MR equals $5, MC equals $6, and ATC equals $4, the firm
a. is earning a profit but should reduce output. b. is earning a profit and should increase output. c. is suffering a loss and should reduce output. d. is suffering a loss but should increase output.
Producers are affected by exchange rate changes because goods manufactured in a country with a weak currency will be relatively cheap in world markets.
a. true b. false
Scaling back the U.S. "war on terror" would:
A. suggest that the United States is allocating less than the optimal amount of resources to the war on terror. B. shift U.S. production from "defense goods" to "civilian goods." C. shift U.S. production from "civilian goods" to "defense goods." D. shift the production possibilities curve inward.
Define a simultaneous one-time game
What will be an ideal response?