Suppose you own a firm that produces widgets and is a monopoly. The market demand is given by the equation P = 100 - 2Q, where P is the price of gadgets and Q is the quantity of gadgets sold per week. The firm's marginal costs are given by the equation MC = 16Q. When the monopolists maximizes profits the price elasticity of demand for widgets is:
Choose one answer.
a. 9
b. 36
c. 0.5
d. 0.02