What is blockbusters mark-up over marginal cost

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Reference no: EM13198585

Blockbuster Movie Rentals has market power in the previously viewed video sales market. The demand curve for blockbuster movies is QD = 10 - 0.4P -> P = 25 - 2.5Q. Blockbusters marginal revenue function is MR(Q) = 25 - 5Q. Blockbusters marginal cost curve is MC(Q) = 0.53 + 0.026Q. Determine Blockbusters profit maximizing price. Calculate Blockbusters elasticity of demand at this price. What is Blockbusters mark-up over marginal cost as a percentage of price?

Reference no: EM13198585

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