Question

MNO Limited publishes a magazine targeted at urban professionals who live on the east and west coasts of the​ U.S., and all of the magazines are printed at a marginal cost of​ $0.50 per copy at a publishing plant in Kansas. If the East Coast elasticity of demand for the magazine is −1.25 and the West Coast elasticity of demand is −​1.50, what prices should MNO Limited charge for the magazines in these two markets in order to maximize​ profits?A.Price should be​ $2.50 on the West Coast and​ $1.50 on the East Coast.B.Price should be​ $0.40 on the West Coast and​ $0.33 on the East Coast.C.Price should be​ $1.50 on the West Coast and​ $2.50 on the East Coast.D.Price should be​ $0.50 in both markets.

Answer 1

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.