A firm in the market for designer jeans has some degree of monopoly power. The demand curve it faces has a price elasticity of demand of -5, while the price elasticity demand of the market is -4. Moreover, the firm has a constant marginal cost of $65.00. Using the rule of thumb for pricing, calculate the firm's profit-maximizing price.

The firm's profit maximization price = $81.25

Explanation:

We are given:

Marginal cost MC = $65

Elasticity of demand ED = -5

Therefore, Using the rule of thumb pricing, we have the equation:

P = $81.25

Therefore the firm's profit maximization price is $81.25

So the firm's profit-maximizing price is  $81.25

Explanation:

Given:

As we know that, the firm's profit-maximizing price has the following formula:

Price= Marginal cost*

<=> Price = $65*

<=> Price = $81.25

So the firm's profit-maximizing price is  $81.25

answer(d) the growth of consumption is likely to remain sluggish even as the economy begins to recover.;