Question: Please answer my tutorial question 1. A publisher faces the following demand schedule for the next novel from one of its popular authors: The author
Please answer my tutorial question


1. A publisher faces the following demand schedule for the next novel from one of its popular authors: The author is paid K2 million to write the book, and the marginal cost of producing the book is a constant $10 per book. a. Compute i. Total revenue at each quantity ii. Total cost at each quantity iii. Profit at each quantity. iv. What quantity would a profit-maximizing publisher choose? v. What price would it charge? b. Compute marginal revenue. How does marginal revenue compare to the price? Explain. c. Graph the marginal-revenue, marginal-cost, and demand curves. At what quantity does 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. 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
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
