If the demand elasticity for a product is -2, and a ...

[imowrer]

If the demand elasticity for a product is -2, and a profit-maximizing firm sells the product for 10, its marginal cost must be
 
  A) 5.
  B) 10.
  C) 15.
  D) 8.

Question 2

If a pharmaceutical firm is researching ways to improve its heartburn medicine and discovers a technique that will improve its allergy medicine, one could conclude that economies of scope exist in that industry.
 
  Indicate whether the statement is true or false

[kxciann]

Answer to Question 1

A

Answer to Question 2

True . Economies of scope imply that the cost of producing two goods together is less than the cost of producing them separately. In this case, the costs of producing heartburn medicine and allergy medicine are lower for the firm that produces both.