Profit-maximizing price of nothing

Assignment Help Macroeconomics
Reference no: EM131163363

Consider the problem of setting a price for a book. The marginal cost of production is constant at $20 per book. The publisher knows from experience that the slope of the demand curve is minus-$0.20 per textbook: Starting with a price of $44, a price cut of $0.20 will increase the quantity demanded by one textbook, or for every dollar the price falls, five more textbooks are purchased. For example, here are some combinations of price and quantity: a. The publisher will choose the profit-maximizing price of $nothing. (Choose the price that comes closest to maximizing profit from the table above.)

Price per textbook: 

$44

$40

$36

$32

$30

Quantity of textbooks:  

80

100

120

140

150

Reference no: EM131163363

Inevitable tendency for competitive industries

"Because firms in any industry can always make greater profits by colluding, there is an inevitable tendency for competitive industries to become cartels over time." Is the

What is peak-load pricing

What is peak-load pricing? How is it similar to price discrimination? How is it distinguished from price discrimination? What is the major reasons for using peak-load pricin

Consider a monopolist

Consider a monopolist who is faced with the market demand curve P = 10 - Q.  Its total cost is given by 2Q. If the monopolist has to use one price, what would be profit maximi

Marginal revenue equals

Each firm currently maximizes its profit by providing 15 oil changes per day. a. For each firm, marginal revenue equals $ . (Enter your response rounded to the nearest dolla

Law of increasing opportunity cost related

Respond to the following question in three well-composed paragraphs: In what ways are the bowed-out shape of the production possibilities curve and the law of increasing opp

Suppose that the demand curve for cantaloupes

Suppose that the demand curve for cantaloupes is P=120-3QD, where P is the Price per pound (in cents) of a cantaloupe and QD is the quantity demanded per week. Suppose that

Problem regarding the production function

a. Derive contingent factor demand L*(w,r,Q), K*(w,r,Q). b. Derive (dk(w,r,Q))/dw, (dk(w,r,Q))/dr, (dk(w,r,Q))/dQ, c.Classify the returns to scale of this production function.

What is the cost of equity

The risk free rate on a 30 year US Treasury Bond is 2.625% and the expected rate of return on the overall stock market is 7%. The BOW lake company has a beta of 1.4. What is

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd