Answer on Microeconomics Question for abdullah
20 a. What price would Aziz Holding charge if it were to maximize its profits?
10 b. What would be the market price if this were a competitive market (with many other firms all having the same technology)?
(P - MC)/P = 1/Ed
1 - 20/P = 2/3
20/P = 1/3
P = $60.
For competitive market MR = MC = P = $20, so the price will be 3 times lower and no one will have profit.
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