A Textbook Publisher Is in Monopolistic Competition

question 54

Multiple Choice

A textbook publisher is in monopolistic competition.If the firm spends nothing on advertising,it can sell no books at $100 a book,but for each $10 cut in price,the quantity of books it can sell increases by 20 books a day.The firm's total fixed cost is $2,400 a day.Its average variable cost and marginal cost is a constant $20 per book.If the firm spends $1,200 a day on advertising,it can increase the quantity of books sold at each price by 50 percent.If the publisher advertises,its profit maximizing level of output is

• A)120 books per day.
• B)80 books per day.
• C)160 books per day.
• D)100 books per day.
• E)240 books per day.

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Definitions:

Borderline

Often referring to Borderline Personality Disorder, a mental health condition marked by a pattern of ongoing instability in moods, behavior, self-image, and functioning.

Legal Status

The standing of an entity or individual under law, determining the rights, duties, and liabilities in a given legal context.

Insanity

A legal term denoting that a person cannot be held responsible for their actions due to psychiatric disorders.

Schizophrenic Disorder

A long-term mental disorder involving a breakdown in the relation between thought, emotion, and behavior, leading to faulty perception, inappropriate actions and feelings, withdrawal from reality and personal relationships into fantasy and delusion, and a sense of mental fragmentation.