A firm that sells e-books - books in digital form, Ask an Expert

Economics

A firm that sells e-books - books in digital form downloadable from the Internet - sells all e-books relating to do-it-yourself topics (home plumbing, gardening, and so on) at the same price. At present, the company can earn a maximum annual profit of $40, 000 when it sells 10,000 copies within a year's time. The firm incurs a 60 cent expense each time a consumer downloads a copy, but the company must spend $100,000 per year developing new editions of the e-books. The company has determined that it would earn zero economic profits if price were equal to average total cost, and in this case it could sell 35,000 copies. Under marginal cost pricing, it could sell 115,000 copies.

In the short? run, to the nearest? cent, what is the? profit-maximizing price of? e-books relating to? do-it-yourself topics?$

At the? profit-maximizing quantity, to the nearest? cent, what is the average total cost of producing-e-books?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91856087

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