Suppose that a well-known scientific fiction writer finishes a new book. The writer’s publisher finds the demand curve for this new book is given by Q = 4200 − 200P, where P is its price. It will cost $2000 to set the book in type. This setup cost is necessary before any copies can be printed. In addition to the setup cost, there is a marginal cost of $8 per book for every book printed. Assume that the publisher wants to maximize the profit from this new book, and considers them-selves as a monopoly. (a) Write down the total revenue (T R(Q)), as a function of the quantity (Q). (b) Write down the total cost (T C(Q)), as a function of the quantity (Q). (c) Find the profit-maximizing quantity (Q∗). (d) Find the profit-maximizing price (P ∗). (e) What is the profit?

Suppose that a well-known scientific fiction writer finishes a new book. The writer’s publisher finds the demand curve for this new book is given by Q = 4200 − 200P, where P is its price. It will cost $2000 to set the book in type. This setup cost is necessary before any copies can be printed. In addition to the setup cost, there is a marginal cost of $8 per book for every book printed. Assume that the publisher wants to maximize the profit from this new book, and considers them-selves as a monopoly. (a) Write down the total revenue (T R(Q)), as a function of the quantity (Q). (b) Write down the total cost (T C(Q)), as a function of the quantity (Q). (c) Find the profit-maximizing quantity (Q∗). (d) Find the profit-maximizing price (P ∗). (e) What is the profit?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.4P

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Question

Suppose that a well-known scientific fiction writer finishes a new book. The writer’s publisher
finds the demand curve for this new book is given by Q = 4200 − 200P, where P is its price. It will cost $2000 to set the book in type. This setup cost is necessary before any copies can be printed. In addition to the setup cost, there is a marginal cost of $8 per book for every book printed. Assume that the publisher wants to maximize the profit from this new book, and considers them-selves as a monopoly.
(a) Write down the total revenue (T R(Q)), as a function of the quantity (Q).
(b) Write down the total cost (T C(Q)), as a function of the quantity (Q).
(c) Find the profit-maximizing quantity (Q∗).
(d) Find the profit-maximizing price (P ∗).
(e) What is the profit?

Please just help with c,d,e

Defintion Defintion Curve that represents the graphical relationship between the total supply of goods and services and the price level in the economy. When the price level increases, producers tend to supply more of a product in the market to earn a higher revenue or vice versa.

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