Question
1.A new musical group called the Flamingos cuts a debut single. The record company determines a number of price points for the group's first single,
1.A new musical group called the "Flamingos" cuts a debut single. The record company determines a number of price points for the group's first single, "The Sweetheart."
Price per download
Quantity of downloads
$2.99
25,000
$1.99
50,000
$1.49
75,000
$0.99
100,000
$0.49
150,000
The record company can produce the song with fixed costs of $10,000 and no variable cost.
a.Determine the total revenue at each price. What is the marginal revenue as the price drops from one level to the next? Please help me explain the calculation of MR.
b.What price would maximize the record company's profits? How much would the company make?
c.If you were the agent for the Flamingos, what signing fee would you request from the record company? Give a detail explanation of why you set that signing fee.
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Principles Of Microeconomics 3e By OpenStax
Authors: OpenStax
3rd Edition
1711471496, 978-1711471495
