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Question

$1.00 Consider the problem of setting a price

  • From Economics: General-Economics
  • Closed, but you can still post tutorials
  • Due on Aug. 30, 2012
  • Asked on Jul. 29, 2012 at 06:58:13AM
Asked by :
cherryneck
 
 
Q:
Consider the problem of setting a price for a book. The marginal cost of production is constant at $20 per book. The publisher knows from experience that the slope of the demand curve is $-0.20 per textbook: Starting with a price of $44, a price cut of $0.20 will increase the quantity of demanded by one textbook, or for every dollar the price falls, five more textbooks are purchased. The publisher will choose the profit maximizing price of $_____ price per textbook $44, $40 $36 $32 $30 Quantity of textbooks: 80,100,120,140,150