Marginal cost of producing this candy is constant

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Cadie's Candy Shop (CCS) makes a special kind of candy that has become very popular with its customers. The marginal cost of producing this candy is constant. It is equal to $3.5 per box.

a. At a markup of 80%, what price should CCS charge for its candy?

b. Assuming that price elasticity of demand for this of kind candy is - 1.5, determine if the price CCS charges for its special candy is a profit-maximizing price. If it is not, what price should it charge?

Reference no: EM13974710

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