If the price elasticity of demand for bananas is -1.5 and the price elasticity o

Question

If the price elasticity of demand for bananas is -1.5 and the price elasticity of demand for grapefruit is -2.5, and the marginal cost of producing each of the items is $0.50 each, what is the profit-maximizing price for each? Answer                                                   
           Bananas: $1.50; Grapefruit: $0.83                             
           Bananas: $0.75; Grapefruit: $1.25                             
           Bananas: $0.34; Grapefruit: $0.20                             
           Bananas: $0.75; Grapefruit: $1.25 If the price elasticity of demand for bananas is -1.5 and the price elasticity of demand for grapefruit is -2.5, and the marginal cost of producing each of the items is $0.50 each, what is the profit-maximizing price for each? If the price elasticity of demand for bananas is -1.5 and the price elasticity of demand for grapefruit is -2.5, and the marginal cost of producing each of the items is $0.50 each, what is the profit-maximizing price for each? Bananas: $1.50; Grapefruit: $0.83 Bananas: $0.75; Grapefruit: $1.25 Bananas: $0.34; Grapefruit: $0.20 Bananas: $0.75; Grapefruit: $1.25                             
           Bananas: $1.50; Grapefruit: $0.83                             
           Bananas: $0.75; Grapefruit: $1.25                             
           Bananas: $0.34; Grapefruit: $0.20                             
           Bananas: $0.75; Grapefruit: $1.25

Explanation / Answer

2.5

3.25

2.84

3.25

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