### Demand and Revenue Analysis for Johnny Rockabilly's Latest CDJohnny Rockabilly has just finished recording his latest CD. His record company's marketing department has determined the demand for the CD as follows:| **Price** | **Number of CDs** ||-----------|-------------------|| $24 | 10,000 || $22 | 20,000 || $20 | 30,000 || $18 | 40,000 || $6 | 50,000 || $3 | 60,000 |The company can produce the CD with no fixed cost and a variable cost of $12 per CD.**Tasks:**1. **Find total revenues and marginal revenues for each of the quantities.**2. **Determine the quantity of CDs that would maximize profit.****Instructions for Analysis****a. Finding Total Revenues and Marginal Revenues:**- Total Revenue (TR) can be calculated using the formula:\[ \text{Total Revenue} = \text{Price} \times \text{Quantity Sold} \]- Marginal Revenue (MR) is the change in total revenue resulting from selling one more unit of the product:\[ \text{Marginal Revenue} = \frac{\Delta \text{Total Revenue}}{\Delta \text{Quantity}} \]**b. Maximizing Profit:**- To find the quantity of CDs that maximizes profit, calculate the profit for each quantity. Profit (π) is given by:\[ \text{Profit} = \text{Total Revenue} - \text{Total Cost} \]where,\[ \text{Total Cost} = \text{Variable Cost} \times \text{Quantity Sold} \]Since there are no fixed costs, the total cost only includes variable costs.In this analysis, you can determine at which level of output (quantity of CDs produced and sold) the profit is maximized by comparing the profits calculated for each price level provided in the table.

We have given demand schedule for Cd's

(1.) Johnny Rockabilly has just finished recording his latest CD. His record companys marketing department determines that the demand for the CD is as follows: Price Number of CDs $24 10,000 22 20,000 20 30,000 18 40,000- 6 50,000 3 60,000 CD. The company can produce the CD with no fixed cost and a variable cost of $12 per a. Find total revenues and marginal revenues for each of the quantities. SCDs Would maximize profit? What would the price be?

(1.) Johnny Rockabilly has just finished recording his latest CD. His record companys marketing department determines that the demand for the CD is as follows: Price Number of CDs $24 10,000 22 20,000 20 30,000 18 40,000- 6 50,000 3 60,000 CD. The company can produce the CD with no fixed cost and a variable cost of $12 per a. Find total revenues and marginal revenues for each of the quantities. SCDs Would maximize profit? What would the price be?

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 3.6P: (Price Elasticity of Supply) Calculate the price elasticity of supply for each of the following...

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