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QUESTION
Assume the price elasticity of demand for physicians' services is -0.2. If your marginal cost per visit is $20, what is your profit-maximizing price
Assume the price elasticity of demand for physicians' services is -0.2. If your marginal cost per visit is $20, what is your profit-maximizing price if you control 5% of the market? What is your profit-maximizing price if you control 15% of the market? What lessons do you draw from this information?
