Lucinda has written a new novel and has chosen to self-publish.Her copyright ensures that no one can
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Lucinda has written a new novel and has chosen to self-publish.Her copyright ensures that no one can legally copy her novel. Thetable below shows the demand for Lucinda's novel and her costs ofpublishing.
| Lucinda's Demand and Costs of Publishing | ||||
Price (dollars) |
Quantity (books) | Marginal Revenue (dollars) | Marginal Cost (dollars) | Average Total Cost (dollars) |
| $45 | 0 | ? | ? | ? |
| 40 | 4,000 | $40 | $5.00 | $6.25 |
| 35 | 8,000 | 30 | 3.75 | 5.00 |
| 30 | 12,000 | 20 | 5.00 | 5.00 |
| 25 | 16,000 | 10 | 10.00 | 6.25 |
| 20 | 20,000 | 0 | 18.75 | 8.75 |
| 15 | 24,000 | ?10 | 31.25 | 12.50 |
a. How many books should Lucinda publish in order to maximizeprofits?
_______ books
b. What price should Lucinda charge for her books in order tomaximize profits?
$ _______ per book
c. How much profit will Lucinda?s books generate if she producesthe profit-maximizing quantity and charges the profit-maximizingprice?
$ ________
d. Identify the profit maximizing price and quantity, and thenshow the amount of profit earned.
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