Question

Suppose a monopoly's price is ( $ 210.00 ) and its marginal cost of production is ( $ 105.00 ). What is the firm's markup? The monopoly's markup is percent. (Enter a numeric response using a real?

Answer 1

The monopoly's markup is 50%.

Step-by-step explanation:

To calculate the monopoly's markup, we need to first understand the relationship between price, marginal cost, and markup.

The markup can be calculated using the formula:

Markup = (Price - Marginal Cost) / Price * 100

Substituting the given values, the markup would be:

Markup = ($210 - $105) / $210 * 100 = 50%

Therefore, the monopoly's markup is 50%.