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What is the profit-maximizing price of e-books in short run

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Reference no: EM131695015

Question - 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).

  • 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?

Reference no: EM131695015

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