What price would the firm charge

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Reference no: EM131081582

Use the demand schedule that follows to answer questions 1, 2, and 3.

1. calculate total revenue and marginal revenue at each quantity.

2. Use Chapter 4's total-revenue test for price elasticity to determine at which price levels the demand is elastic and inelastic.

3. Suppose the marginal cost of successive units of output were $3.50. What output would the profit-seeking firm produce and what price would the firm charge?

Price	Quantity Demanded	Total Revenue	Marginal Revenue	Elasticity
$ 8.00	0
$ 7.50	1
$ 7.00	2
$ 6.50	3
$ 6.00	4
$ 5.50	5
$ 5.00	6
$ 4.50	7
$ 4.00	8
$ 3.50	9
$ 3.00	10

A book publisher initially prices both hardback books and paperback books at $20 per book. The hardback version comes out first, followed two months later by the paperback version. The publisher initially sells the same number of hardbacks and softbacks (100 each). A hardback book costs $3.00 to produce, and a paperback book costs $2.00 to produce.

Reference no: EM131081582

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