Marginal revenue from selling another book

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Reference no: EM139143

Q1. Illustrate what is the marginal revenue from selling another book for the author? Explain how does it compare to the marginal revenue of selling another book for the publisher? Briefly explain.

Q2. Dave has $300 to spend each month on DVDs and CDs. DVDs and CDs both currently have a cost of $10, and Dave is maximizing his utility by buying 20 DVDs and 10 CDs. Assume Dave still has $300 to spend, but the cost of DVDs rises to $12, while the cost of CDs drops to $6. Is Dave better or worse off than he was before the cost change? Use a budget constraint-indifference curve graph to illustrate your answer.

Reference no: EM139143

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