A Monopolist Faces a Constant Marginal Cost of $1 Per

A monopolist faces a constant marginal cost of $1 per unit and has no fixed costs. If the price elasticity of demand for this product is constant and equal to -4, then

A) to maximize profits, he should charge a price of $4.
B) he is not maximizing profits.
C) to maximize profits, he should charge a price of $1.33.
D) to maximize profits, he should charge a price of $1.25.
E) None of the above.

Correct Answer:

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