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What is the? profit-maximizing price of? e-books

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Reference no: EM132021282

A firm that sells? e-books - books in digital form downloadable from the Internet? - sells all? e-books relating to? do-it-yourself topics? (home plumbing,? gardening, and so? on) at the same price. At? present, the company can earn a maximum annual profit of ?$45,000 when it sells 15,000 copies within a? year's time. The firm incurs a 30?-cent expense each time a consumer downloads a? copy, but the company must spend ?$145,000 per year developing new editions of the? e-books. The company has determined that it would earn zero economic profits if price were equal to average total? cost, and in this case it could sell 30,000 copies. Under marginal cost? pricing, it could sell 110,000 copies. In the short? run, to the nearest? cent, what is the? profit-maximizing price of? e-books relating to? do-it-yourself topics?

Reference no: EM132021282

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