A monopoly producing a chip at a marginal cost of $6 per unit faces a demand elasticity of ?2.5. Which price should it charge to optimize its profits?

If the demand for a good is elastic, when the price increases, the

A) demand will decrease. B) quantity demanded will increase. C) quantity demanded will decrease by a smaller percentage than the price increased. D) quantity demanded will decrease by a greater percentage than the price increased.

In the long-run, a firm in monopolistic competition has

A) a price that exceeds its average total cost. B) a price that exceeds its marginal cost. C) an average total cost that exceeds its price. D) a marginal cost that exceeds its price.