Question
Can you please give me a step by step explanation for the following questions: 1) A book that sounds just perfect for me, Kate Raworth's
Can you please give me a step by step explanation for the following questions:
1) A book that sounds just perfect for me, Kate Raworth's Doughnut Economics is available on Amazon for $50 for the hardback and $14.67 for paperback. From the publisher's perspective, the difference in the cost between each version of the book seems negligible; it may cost a little bit more to produce the hardcover, but certainly not more than three times as much. Hardback versions usually also get published a few months before paperback versions are published. How do you explain the different prices for essentially the same product, given that the cost to the publisher of providing each type of book is basically the same?
Amazon also offers the Kindle digital e-book version for $13. The cost to Amazon to produce a new "copy" for the next consumer is virtually nothing; just the sending of some data to the customer's device. Why is Amazon able to charge $13 when its cost is basically zero and the market for books is likely very competitive?
2) Shaughnessy Consulting, LLC currently enjoys a patent on software that estimates economic damages for clients involved in personal injury lawsuits. Demand for my software is
QD = 380 - 20P. Creating the software cost me about $1,250 in development and coding. I can produce a copy of the software for $9.50 per unit (constant cost).
a.How many copies of the software should I attempt to sell? At what price should I sell it? How much profit would I make?
b.My patent expires in a year, and I know other economic consultants will produce competing software. What quantity and price will result once competing software emerges? How much consumer surplus will my clients (lawyers) gain once the competitors enter? (For measuring consumer surplus, recall that area of a triangle = * base * height.)
c.How much deadweight loss is created by my patent and monopoly in this software?
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