Subject:Business economics Q.1): Apublisher faces the following demand schedule for the next novel from one its popular authors: Price Quantity demand $100 0 novels 90 100,000 80 200,000 70 300,000 60 400,000 50 500,000 40 600,000 30 700,000 20 800,000 10 900,000 0 1,000,000 the author is paid $2 million to write the book & the marginal cost of publishing the book is a constant $10 per book a) compute total revenue, total cost and paid at each qty. what quantity would a profit -maximizing publisher choose? what price would it charge? b) compute marginal revenue (recall that MR=change TR/Change Q). How does marginal revenue compare to the price? explain
Subject:Business economics
Q.1): Apublisher faces the following
$100 0 novels
90 100,000
80 200,000
70 300,000
60 400,000
50 500,000
40 600,000
30 700,000
20 800,000
10 900,000
0 1,000,000
the author is paid $2 million to write the book & the marginal cost of publishing the book is a constant $10 per book
a) compute total revenue, total cost and paid at each qty. what quantity would a profit -maximizing publisher choose? what price would it charge?
b) compute marginal revenue (recall that MR=change TR/Change Q). How does marginal revenue compare to the price? explain
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