This preview shows page 1. Sign up to view the full content.
Unformatted text preview: e z to.mhe c loud.mc gr a w hill.c om/hm.tpx? todo= pr intvie w 1/14 1/15/14 Assignme nt Pr int Vie w The publisher's profitmaximizing sales quantity will be the quantity at which the difference in revenue and
cost is greatest, where marginal revenue equals marginal cost (MC): 0.85MR = MC MR = MC/0.85.
Thus, the author will want to set a lower price than the publisher to sell the higher quantity. Intuitively, the
author will find selling additional books to be a more attractive proposition than the publisher (and so will want
to set a lower price), because the publisher will bear any additional cost of producing extra books. 7. awar d: 4 out of
4.00 points
A pricetaking firm's variable cost function is where Q is its output per week. It has a sunk fixed cost of $1,000 per week. Its marginal cost is Instructions: Enter your answers as whole numbers.
a. What is its profitmaximizing output when the price is P = $729? 9 units b. What is the profit maximizing output if the fixed cost is avoidable? 9 units rev is ed jrl 08112011 Worksheet Section: Marginal Revenue,
Marginal Cost, and Profit
Mazimization A pricetaking firm's variable cost function is where Q is its output per week. It has a sunk fixed cost of $1,000 per week. Its marginal cost is Instructions: Enter your answers as whole numbers.
a. What is its profitmaximizing output when the price is P = $729? 9 units b. What is the profit maximizing output if the fixed cost is avoidable? e z to.mhe c loud.mc gr a w hill.c om/hm.tpx? todo= pr intvie w 2/14 1/15/14 Assignme nt Pr int Vie w 9 units rev is ed jrl 08112011 Explanation:
A firm is a price taker when it can sell as much as it wants at some given price P, but nothing at any higher
price. To find the profitmaximizing sales quantity using marginal...
View
Full
Document
This note was uploaded on 01/22/2014 for the course ECO 3352 taught by Professor Ax during the Fall '13 term at Troy.
 Fall '13
 AX

Click to edit the document details