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Johnny Rockabilly has just finished recording his latest CD. The organization can produce the CD with no fixed cost also a variable cost of $5 per CD.
A) Find total income for quantity equal to 10,000, 20,000 also so on. Illustrate what is the marginal income for each 10,000 increase in the quantity sold?
B) Illustrate what quantity of CDs would maximize profit? Illustrate what would the price be? Illustrate what would the profit be? C) If you were Johnny's agent, illustrate what recording fee would you advise Johnny to demand from the record organization? Why?
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Indicate whether there will be economies of scale, diseconomies of scale, or constant returns to scale if the facilities are built optimally.
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