About what price should the firm charge

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The marginal cost of preparing a large latte in a specialty coffee house is constant at $1. The firm's market research reveals that the elasticity of demand for its large lattes is constant, with a value of about -1.3. If the firm wants to maximize profit from the sale of large lattes, about what price should the firm charge? Use the inverse elasticity pricing rule.

Reference no: EM131378479

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