Question: If the price elasticity of demand for bananas is -1.5 and the price elasticity of demand for grapefruit is -2.5, and the marginal cost of producing each of the items is $0.50 each, what is the profit-maximizing price for each?
Bananas: $1.50; Grapefruit: $0.83
Bananas: $0.75; Grapefruit: $1.25
Bananas: $0.34; Grapefruit: $0.20
Bananas: $0.75; Grapefruit: $1.25