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An e-commerce company sells e-books related to self improvement topics. All e-books are sold at the same price. Currently, the company can earn a maximum annual profit of $25,000 when it sells 10,000copies during the year. The company incurs a cost of 50 cents each time a consumer downloads a copy of an e-book. The company must spend $100,000 per year to develop new editions of the e-books. The company has determined that it would earn zero economic profits if it could sell annually 20,000 copies.

  • In the short run, what is the profit-maximizing price of e-books?
  • How would you characterize the industry in which this company operates? Why?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M92383766
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