Problems & Applications (Ch 15) Back to Assignment Affempts Average / 7 1. Problems and Applications Q1 A publisher faces the following demand schedule for the next novel from one of its popular authors Price Quantity Demanded (Dollars) (Coplex) 50 45 100,000 40 200,000 35 300,000 30 400,000 25 500,000 20 600,000 15 700,000 10 800,000 5 900,000 1,000,000 The author is paid $500,090 to write the novel, and the marginal cost of publishing the novel is a constant $15 per copy. Complete the second, fourth, and fifth columns of the following table by computing total revenue, total cost, and profit at each quantity. Complete the second, fourth, and firth columns of the following table by computing total revenue, total cost, and profit at each quantity. Quantity Total Revenue Marginal Revenue Total Cost Profit (Coples) (Dollars) (Dollars) (Dollars) (Dollars) 0 100,000 200,000 300,000 400,000 500,090 600,000 700,000 800,090 900,DO0 1,000,090 Which of the following quantity-price combinations would a profit-maximizing publisher choose? (Note: If the publisher is indifferent between more than one choice, select all of the indifferent combinations.) Check all that apply :300,000 caples at a price of $35 400,000 coples at a price of $30 ) 500,000 copies at a price of $25 600,000 copies at a price of $20 Complete the third column of the previous table by computing marginal revenue. (Hint: Recall that MR= H)True or False: At each quantity, marginal revenue is less than the price. True O False Use the black points (plus symbol) to graph the marginal revenue from the 100,000th, 200,000th, 300,000th, 400,000th, 500,090th, and 600,000th copy of the novel. Remember to plot from left to right and to plot between integers, For example, if the marginal revenue of increasing production from 100,000 copies to 200,000 copies were 10, then you would plot a point at (150, 10). Next use the orange line (square symbol) to graph the marginal-cost curve faced by the publisher. Finally, use the blue points (circle symbol) to graph demand at the following quantities (in thousands): 0, 100, 200, 300, 400, 500, 600, 700, 800, 900, and 1,000. (? + Marginal Revenue Marginal Cost Demand Deadweight Loss 109 209 209 409 560 900 703 800 950 1208 Quantity (Thousands of copies) The marginal-revenue and marginal-cost curves intersect at a quantity of_ copies. On the previous graph, use the black triangle (plus symbols) to shade the area representing deadweight loss. If the author were paid $400,000 instead of $500,000 to write the book, the publisher would the price it charges for a copy of the NOVEL Suppose the publisher was not profit-maximizing but was concerned with maximizing economic efficiency, and the author of a novel was paid 1500,000 to write the book. In this case, the publisher would charge S for a copy of the novel and earn a profit of (Note: If the publisher experiences a loss, be sure to enter a negative number for profit.)