The Cartel of Copper Exporting Countries Is Called COPEC

The cartel of copper exporting countries is called COPEC.As part of an international marketing agreement, the United States has agreed to buy all the copper that COPEC wants to sell the United States at a constant price of $100 per ton.COPEC also sells copper in Europe at a price of $150 per ton.COPEC acts just like a monopolist.If COPEC finds it profitable to sell in the United States at $100 per ton and simultaneously to sell in Europe for $150 a ton, what is the price elasticity of demand of COPEC's copper in the European market? (Hint: What is COPEC's marginal revenue in the U.S.market?)

A) -1
B) -2
C) -3
D) -1/3
E) -2/3

Correct Answer:

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