The marginal-revenue and marginal-cost curves intersect at a quantity of copies. On the previous graph, use the black triangle (plus symbols) to shade the area representing deadweight loss. If the author were paid $3 million instead of $2 million to write the book, the publisher would the price it charges for a copy of the novel. Suppose the publisher was not profit-ma but was concerned with izing economic efficiency, and the author of a novel was paid $2
The marginal-revenue and marginal-cost curves intersect at a quantity of copies. On the previous graph, use the black triangle (plus symbols) to shade the area representing deadweight loss. If the author were paid $3 million instead of $2 million to write the book, the publisher would the price it charges for a copy of the novel. Suppose the publisher was not profit-ma but was concerned with izing economic efficiency, and the author of a novel was paid $2
The marginal-revenue and marginal-cost curves intersect at a quantity of copies. On the previous graph, use the black triangle (plus symbols) to shade the area representing deadweight loss. If the author were paid $3 million instead of $2 million to write the book, the publisher would the price it charges for a copy of the novel. Suppose the publisher was not profit-ma but was concerned with izing economic efficiency, and the author of a novel was paid $2
A publisher faces the following demand schedule for the next novel from one of its popular authors.
Price Quantity Demanded
(Dollars) (Copies)
100 0
90 100,000
80 200,000
70 300,000
60 400,000
50 500,000
40 600,000
30 700,000
20 800,000
10 900,000
0 1,000,000
The author is paid $2 million to write the novel, and the marginal cost of publishing the novel is a constant $10 per copy.
Transcribed Image Text:Use the black points (plus symbol) to graph the marginal revenue from the 100,000th, 200,000th, 300,000th, 400,000th, 500,000th, and 600,000th
copy of the novel. Remember to plot from left to right and to plot between integers. For example, if the marginal revenue of increasing production
from 100,000 copies to 200,000 copies were 10, then you would plot a point at (150, 10). Next use the orange line (square symbol) to graph the
marginal-cost curve faced by the publisher. Finally, use the blue points (circle symbol) to graph demand at the following quantities (in thousands): 0,
100, 200, 300, 400, 500, 600, 700, S800, 900, and 1,000.
100
90
80
Marginal Revenue
70
60
Marginal Cost
50
40
30
Demand
20
10
Deadweight Loss
-10
100
200
300
400
500
600
700
800
900
1000
Quantity (Thousands of copies)
The marginal-revenue and marginal-cost curves intersect at a quantity of
сopies.
On the previous graph, use the black triangle (plus symbols) to shade the area representing deadweight loss.
If the author were paid $3 million instead of $2 million to write the book, the publisher would
the price it charges for a copy of the
novel.
Suppose the publisher was not profit-maximizing but was concerned with maximizing economic efficiency, and the author of a novel was paid $2
million to write the book.
In this case, the publisher would charge
for a copy of the novel and earn a profit of s
|. (Note: If the publisher
experiences a loss, be sure to enter a negative number for profit.)
Price
Transcribed Image Text:Complete the second, fourth, and fifth columns of the following table by computing total revenue, total cost, and profit at each quantity.
Quantity
Total Revenue
Marginal Revenue
Total Cost
Profit
(Copies)
(Dollars)
(Dollars)
(Dollars)
(Dollars)
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
Which of the following quantity-price combinations would a profit-maximizing publisher choose? (Note: If the publisher is indifferent between more
than one choice, select all of the indifferent combinations.) Check all that apply.
O 300,000 copies at a price of $70
O 400,000 copies at a price of $60
O 500,000 copies at a price of $50
O 600,000 copies at a price of $40
Complete the third column of the previous table by computing marginal revenue. (Hint: Recall that MR
ATR )
True or False: At each quantity, marginal revenue is less than the price.
True
O False
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