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A publisher has just finished publishing a new book. The company's marketing department estimates that the demand for the book is given by P =

A publisher has just finished publishing a new book. The company's marketing department estimates that the demand for the book is given by P = 100 - 0.0001Q (where: P and Q are the price and quantity respectively).

Assume that the company can produce the book at a fixed cost of zero and the marginal cost (equal to the average total cost) is constant at $10.

  1. Write down the equation for the marginal revenue (3 points)
  2. How many copies of the book would maximize the company's profits? (Show your work)
  3. (5 points)
  4. What would the profit-maximizing price be? (Show your work) (5 points)
  5. How much profit would the company make? (Show your work) (5 points)

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