Question

You are running a photography business. You look at your demand and have to decide what price to charge. Since you are the only photographer in town, you are free to act as you wish. Suppose that the cost of producing each photograph was $12, how much would you charge? Why?

Answer 1

The cost of production = $12

since the firm is the only one on market, for the business etiquette and to avoid explosion of consumer, i will charge $ 16 to earn a profit of $16-$12 = $4