Order the answer to: A publisher faces the following demand schedule for the next

Best Writers business-economics Order the answer to: A publisher faces the following demand schedule for the next

business-economics

Order the answer to: A publisher faces the following demand schedule for the next

Question A publisher faces the following demand schedule for the next novel from one of its popular authors: Price Quantity Demanded $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, and the marginal cost of publishing the book is a constant $10 per book. a. Compute total revenue, total cost, and profit at each quantity. What quantity would a profit-maximizing publisher choose? What price would it charge? b. Compute marginal revenue. (Recall that MR = ?TR/?Q.) How does marginal revenue compare to the price? Explain. c. Graph the marginal-revenue, marginal-cost, and demand curves. At what quantity do the marginal-revenue and marginal-cost curves cross? What does this signify? d. In your graph, shade in the deadweight loss. Explain in words what this means. e. If the author were paid $3 million instead of $2 million to write the book how would this affect the publisher’s decision regarding what price to charge? Explain. f. Suppose the publisher was not profit-maximizing but was concerned with maximizing economic efficiency. What price would it charge for the book? How much profit would it make at this price?
Subject business-economics
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