Roaring Lion Studios can produce DVDs at a constant marginal cost of $5 per disk, and the studio has just releasing the DVD for its latest hit film, Ernest Goes to the Hamptons. The retail price of the DVD is $25, and the elasticity of demand for this film is -2. Has the studio selected the profit-maximizing retail price for this DVD?
Roaring Lion Studios can produce DVDs at a constant marginal cost of $5 per disk,and the studio has just releasing the DVD for its latest hit film, Ernest Goes to theHamptons. The retail price of…
