East Frisian Press is trying to decide whether it would be profitable to produce a new edition of Microeconomics for the Muddleheaded after one year rather than after two years. If it produces a new edition after one year, it will destroy the used book market and all copies that are purchased will be new copies. In this case, the number of new copies that will be demanded in each of the two years will be 100(90−p), where p is the price charged. The variable cost of each copy sold remains $10.
(a) Write an expression for the total number of copies sold over the course of two years if the price is p in each year _____________ Also, write an expression for total revenue net of variable costs as a function of p. ______________
(b) Find the price that maximizes total revenue net of variable costs.
(c) The total number of new books sold in the first year would be ___________ and the total number of books sold in the second year would be __________
(d) East Frisian’s total revenue net of variable costs, if it markets a new edition after one year, will be
(e) Would it be more profitable for East Frisian Press to produce a new edition after one year or after two years? ___________ Which would be better for students? ____________________