Consider the problem of picking a price for an economics

Assignment Help Business Economics

Reference no: EM13353048

Consider the problem of picking a price for an economics textbook. The marginal cost of production is constant at $20 per book. The publisher knows from experience that the slope of the demand curve is $.20: starting with a price of $48, a price cut of $.20 will increase the quantity of books demanded by 1 book. For example, here are some combinations of price and quantity:
Price 44 40 36 32 30
Quantity 80 100 120 140 150

a. Find the marginal revenue at each quantity?

b. What price will the publisher pick?

c. Suppose that the author receives a royalty payment equal to 10% of the total sales revenue from the book. If the author could pick a price, what would it be?

d. Why do the publisher and the author disagree about the price for the book?

e. Design an alternative author-compensation scheme under which the author and the publisher would pick the same price.

Reference no: EM13353048

Questions Cloud

1 discuss the pros and cons of central banks setting policy : 1. discuss the pros and cons of central banks setting policy based on rules as opposed to setting policy based upon the

A company builds furniture recently different woods they : a company builds furniture. recently different woods they use have become harder to obtain. consultation with

Two firms are planning their market strategies firm k can : two firms are planning their market strategies. firm k can earn 25 million in profits from strategy s if firm l

Q1 explain why each of the following statements is true : q1. explain why each of the following statements is true false or uncertain according to economic principles.suppose

Consider the problem of picking a price for an economics : consider the problem of picking a price for an economics textbook. the marginal cost of production is constant at 20

Q1 i cant seem to figure out how to calculate if you given : q1. i cant seem to figure out how to calculate. if you given the amount of money an individual will earn during their

Q1 in 2003 a seat on the chicago board of trade cbot sold : q1. in 2003 a seat on the chicago board of trade cbot sold for only 338000 compared to 2.0 million for on the new york

Suppose that a farmer has two very different 100-acre plots : suppose that a farmer has two very different 100-acre plots of land. suited for growing rice than corn one is very wet

Q 1 country z is a developing country that is facing : q. 1. country z is a developing country that is facing problems of deforestation. for agriculture farmers are clearing

User Account

All Pages