Career advising and professional development

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Digital Books, LLC is a company that sells e-books related to career advising and professional development. Digital Books, LLC earns a yearly positive economic profit of $25,000 if it can sell 10,000 e-books. Each time, a customer buys an e-book it incurs a cost of $0.50 (cost of downloading each e-book). Digital Books, LLC spends each year $100,000 developing new e-books (new topics and new editions). Is the company market- competitive or not? What is the profit-maximizing price of e-books in the short run? What is your prediction of the profit-maximizing price of e-books in the long run? Will the profit-maximizing price of e-books change in the long run? Why? Why not? Should we include fixed costs in formulas of short-run and long-run profit maximization or we can avoid it in both cases? Is $0.50 -VC or MC?

Reference no: EM132219239

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