To find the firm's price elasticity of demand (ε) in a monopoly, we use the formula for the monopoly's elasticity of demand in terms of price and marginal cost:

$\epsilon = \frac{P}{P - MC}$

Where:

• $P$ is the price of the good (in this case, $180.00),
• $MC$ is the marginal cost (in this case, $108.00).

Let's calculate:

$\epsilon = \frac{180}{180 - 108} = \frac{180}{72} = 2.5$

So, the monopoly's price elasticity of demand is $\epsilon = 2.5$.

This means the demand is elastic; for every 1% change in price, the quantity demanded changes by 2.5%.

Would you like more details or have any questions?

Here are five related questions:

1. How does elasticity of demand affect a monopolist's pricing strategy?
2. What is the relationship between marginal revenue and elasticity in a monopoly?
3. How would an increase in marginal cost affect the monopoly’s price elasticity of demand?
4. What does it mean if a monopoly's elasticity of demand is less than 1?
5. How can a monopoly maximize its profit based on elasticity?

Tip: In a monopoly, the price elasticity of demand plays a crucial role in determining optimal pricing for maximum profit. The more elastic the demand, the more sensitive consumers are to price changes.