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The marginal-revenue and marginal-cost curves intersect at a quantity of copies. On the previous graph, use the black triangle (plus symbols) to shade the area representing deadweight loss. If the author were paid $3 million instead of $2 million to write the book, the publisher would the price it charges for a copy of the novel. Suppose the publisher was not profit-ma but was concerned with izing economic efficiency, and the author of a novel was paid $2

The marginal-revenue and marginal-cost curves intersect at a quantity of copies. On the previous graph, use the black triangle (plus symbols) to shade the area representing deadweight loss. If the author were paid $3 million instead of $2 million to write the book, the publisher would the price it charges for a copy of the novel. Suppose the publisher was not profit-ma but was concerned with izing economic efficiency, and the author of a novel was paid $2

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. Problems and Applications Q1

A publisher faces the following demand schedule for the next novel from one of its popular authors.

Price                               Quantity Demanded

(Dollars)                         (Copies)

100                                  0

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 novel, and the marginal cost of publishing the novel is a constant $10 per copy.

Use the black points (plus symbol) to graph the marginal revenue from the 100,000th, 200,000th, 300,000th, 400,000th, 500,000th, and 600,000th copy of the novel. Remember to plot from left to right and to plot between integers. For example, if the marginal revenue of increasing production from 100,000 copies to 200,000 copies were 10, then you would plot a point at (150, 10). Next use the orange line (square symbol) to graph the marginal-cost curve faced by the publisher. Finally, use the blue points (circle symbol) to graph demand at the following quantities (in thousands): 0, 100, 200, 300, 400, 500, 600, 700, S800, 900, and 1,000. 100 90 80 Marginal Revenue 70 60 Marginal Cost 50 40 30 Demand 20 10 Deadweight Loss -10 100 200 300 400 500 600 700 800 900 1000 Quantity (Thousands of copies) The marginal-revenue and marginal-cost curves intersect at a quantity of сopies. On the previous graph, use the black triangle (plus symbols) to shade the area representing deadweight loss. If the author were paid $3 million instead of $2 million to write the book, the publisher would the price it charges for a copy of the novel. Suppose the publisher was not profit-maximizing but was concerned with maximizing economic efficiency, and the author of a novel was paid $2 million to write the book. In this case, the publisher would charge for a copy of the novel and earn a profit of s |. (Note: If the publisher experiences a loss, be sure to enter a negative number for profit.) Price
Transcribed Image Text:Use the black points (plus symbol) to graph the marginal revenue from the 100,000th, 200,000th, 300,000th, 400,000th, 500,000th, and 600,000th copy of the novel. Remember to plot from left to right and to plot between integers. For example, if the marginal revenue of increasing production from 100,000 copies to 200,000 copies were 10, then you would plot a point at (150, 10). Next use the orange line (square symbol) to graph the marginal-cost curve faced by the publisher. Finally, use the blue points (circle symbol) to graph demand at the following quantities (in thousands): 0, 100, 200, 300, 400, 500, 600, 700, S800, 900, and 1,000. 100 90 80 Marginal Revenue 70 60 Marginal Cost 50 40 30 Demand 20 10 Deadweight Loss -10 100 200 300 400 500 600 700 800 900 1000 Quantity (Thousands of copies) The marginal-revenue and marginal-cost curves intersect at a quantity of сopies. On the previous graph, use the black triangle (plus symbols) to shade the area representing deadweight loss. If the author were paid $3 million instead of $2 million to write the book, the publisher would the price it charges for a copy of the novel. Suppose the publisher was not profit-maximizing but was concerned with maximizing economic efficiency, and the author of a novel was paid $2 million to write the book. In this case, the publisher would charge for a copy of the novel and earn a profit of s |. (Note: If the publisher experiences a loss, be sure to enter a negative number for profit.) Price
Complete the second, fourth, and fifth columns of the following table by computing total revenue, total cost, and profit at each quantity. Quantity Total Revenue Marginal Revenue Total Cost Profit (Copies) (Dollars) (Dollars) (Dollars) (Dollars) 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 Which of the following quantity-price combinations would a profit-maximizing publisher choose? (Note: If the publisher is indifferent between more than one choice, select all of the indifferent combinations.) Check all that apply. O 300,000 copies at a price of $70 O 400,000 copies at a price of $60 O 500,000 copies at a price of $50 O 600,000 copies at a price of $40 Complete the third column of the previous table by computing marginal revenue. (Hint: Recall that MR ATR ) True or False: At each quantity, marginal revenue is less than the price. True O False
Transcribed Image Text:Complete the second, fourth, and fifth columns of the following table by computing total revenue, total cost, and profit at each quantity. Quantity Total Revenue Marginal Revenue Total Cost Profit (Copies) (Dollars) (Dollars) (Dollars) (Dollars) 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 Which of the following quantity-price combinations would a profit-maximizing publisher choose? (Note: If the publisher is indifferent between more than one choice, select all of the indifferent combinations.) Check all that apply. O 300,000 copies at a price of $70 O 400,000 copies at a price of $60 O 500,000 copies at a price of $50 O 600,000 copies at a price of $40 Complete the third column of the previous table by computing marginal revenue. (Hint: Recall that MR ATR ) True or False: At each quantity, marginal revenue is less than the price. True O False
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