Will the author be happy with the book company output choice

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Reference no: EM13921643

Textbook authors typically receive a simple percentage of total revenue generated from book sales. The publisher bears all the production costs and chooses the output level. Sup- pose the retail price of a book is fixed at $50. The author receives $10 per copy, and the firm receives $40 per copy. The firm is interested in maximizing its own profits. Will the author be happy with the book company's output choice? Does the selected output maximize the joint profits (for both the author and company) from the book?

Reference no: EM13921643

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