What price should lucinda charge for her books

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Reference no: EM131575149

Question - Lucinda has written a new novel and has chosen to self-publish. Her copyright ensures that no one can legally copy her novel. The table below shows the demand for Lucinda's novel and her costs of publishing.

Lucinda's Demand and Costs of Publishing

Price (dollars)

 

Quantity  (books)

Marginal  Revenue  (dollars)

Marginal  Cost (dollars)

Average  Total Cost (dollars)

$45

0

-

-

-

40

4,000

$40

$5.00

$6.25

35

8,000

30

3.75

5.00

30

12,000

20

5.00

5.00

25

16,000

10

10.00

6.25

20

20,000

0

18.75

8.75

15

24,000

- 10

31.25

12.50

a. How many books should Lucinda publish in order to maximize profits?

b. What price should Lucinda charge for her books in order to maximize profits?

c. How much profit will Lucinda's books generate if she produces the profit-maximizing quantity and charges the profit-maximizing price?

Reference no: EM131575149

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