Question: An author has signed a contract in which the publisher promises to pay her $10,000 plus 20 percent of the revenue from the sale of

An author has signed a contract in which the publisher promises to pay her $10,000 plus 20 percent of the revenue from the sale of her book. The MC of publishing book is positive and rising. The publisher maximizes its profit while author care only about the revenue from the project. Draw a graph and clearly specify the quantities that the publisher and the author would like to be produced. Will the author prefer a higher book price than the publisher?

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