Suppose that in the early part of a new book's life, sales drop by 15% to 20% each term, as the pool of used books on the market grows. This is because after being on the market, the latest edition of a given textbook will have made its way into the used textbook market, giving many students the opportunity to move from new textbooks toward used ones. As the supply of used textbooks increases, the price of used textbooks decreases, and thus the expected resale value for new textbooks declines. Suppose the publisher still plans to charge the same price of $140 per new copy of the textbook between editions. Adjust the previous graph to show the effect of the market for used textbooks on the demand for new economics textbooks in 2019. (Note: Select and drag the curve to the desired position. The curve will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.) Next, use the purple rectangle (diamond symbols) to shade the area representing the revenue the publisher should expect in 2019. (Note: Select and drag the shaded region from the palette to the graph. To resize the shaded region, select one of the points and move to the desired position. To see the area of the rectangle, select the shaded region.) Then answer the question that follows. In 2019, at $140, copies of textbook will be demanded, and the publisher's expected revenue is $ Suppose now that the publisher realizes the damaging effect of the market for used textbooks on its revenue. Market research suggests that on average, between editions, the price of an economics textbook declines by approximately 50%. To offset the potential damage to revenue, the publisher decides to sell both the printed textbook at $140 and an electronic version of the textbook at a competitive price of $40, which is approximately 75% less than the price of a new textbook. By design, e-books offer the same content along with a Type here to search a 35 P 59°F 4) 10:48 PM 9/25/2023 ☐
Suppose that in the early part of a new book's life, sales drop by 15% to 20% each term, as the pool of used books on the market grows. This is because after being on the market, the latest edition of a given textbook will have made its way into the used textbook market, giving many students the opportunity to move from new textbooks toward used ones. As the supply of used textbooks increases, the price of used textbooks decreases, and thus the expected resale value for new textbooks declines. Suppose the publisher still plans to charge the same price of $140 per new copy of the textbook between editions. Adjust the previous graph to show the effect of the market for used textbooks on the demand for new economics textbooks in 2019. (Note: Select and drag the curve to the desired position. The curve will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther.) Next, use the purple rectangle (diamond symbols) to shade the area representing the revenue the publisher should expect in 2019. (Note: Select and drag the shaded region from the palette to the graph. To resize the shaded region, select one of the points and move to the desired position. To see the area of the rectangle, select the shaded region.) Then answer the question that follows. In 2019, at $140, copies of textbook will be demanded, and the publisher's expected revenue is $ Suppose now that the publisher realizes the damaging effect of the market for used textbooks on its revenue. Market research suggests that on average, between editions, the price of an economics textbook declines by approximately 50%. To offset the potential damage to revenue, the publisher decides to sell both the printed textbook at $140 and an electronic version of the textbook at a competitive price of $40, which is approximately 75% less than the price of a new textbook. By design, e-books offer the same content along with a Type here to search a 35 P 59°F 4) 10:48 PM 9/25/2023 ☐
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that in the early part of a new book's life, sales drop by 15% to 20% each term, as the pool of used books on the market
grows. This is because after being on the market, the latest edition of a given textbook will have made its way into the used textbook
market, giving many students the opportunity to move from new textbooks toward used ones. As the supply of used textbooks
increases, the price of used textbooks decreases, and thus the expected resale value for new textbooks declines. Suppose the publisher
still plans to charge the same price of $140 per new copy of the textbook between editions.
In 2019, at $140,
Adjust the previous graph to show the effect of the market for used textbooks on the demand for new economics textbooks in 2019. (Note: Select
and drag the curve to the desired position. The curve will snap into position, so if you try to move a curve and it snaps back to its original position,
just drag it a little farther.) Next, use the purple rectangle (diamond symbols) to shade the area representing the revenue the publisher should expect
in 2019. (Note: Select and drag the shaded region from the palette to the graph. To resize the shaded region, select one of the points and move to
the desired position. To see the area of the rectangle, select the shaded region.) Then answer the question that follows.
copies of textbook will be demanded, and the publisher's expected revenue is $
Suppose now that the publisher realizes the damaging effect of the market for used textbooks on its revenue. Market research suggests
that on average, between editions, the price of an economics textbook declines by approximately 50%. To offset the potential damage
to revenue, the publisher decides to sell both the printed textbook at $140 and an electronic version of the textbook at a competitive
price of $40, which is approximately 75% less than the price of a new textbook. By design, e-books offer the same content along with a
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News Analysis: When It Comes To Textbooks, Students and Publishers Do Their Homework
On the following graph, use the black point (cross symbol) to indicate the point on the demand curve at $140. (Note: Dashed drop lines will
automatically extend to both axes.) Then answer the question that follows.
PRICE (Dollars per copy)
200
180
160
140
120
100
80
60
40
20
0
X +
The market for new economics textbooks (Print only)
In 2018, at $140,
80 100 120 140 160 180 200
0 20 40 60
QUANTITY OF ECONOMICS TEXTBOOKS (Thousands of copies)
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Demand
a
35
Demand
60,000 copies of the textbook are demanded, and the publisher's revenue is
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Revenue in 2019
?
$8,400,000
Hig...
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