A Book Vendor Can Produce a Book at a Constant

question 16

Multiple Choice

A book vendor can produce a book at a constant MC equal to zero, and its potential buyers have the following reservation prices: $55, $50, $45, $40, $35, $30, $25, $20, $15, $10, $5. If the book vendor must announce a take it or leave it price (i.e., he cannot price discriminate) , what price maximizes profits?

• A)$30
• B)$35
• C)$25
• D)$40

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Definitions:

Short-term Memory

A cognitive system that temporarily holds a limited amount of information in awareness for a short period of time, typically seconds to minutes.

Form New Memories

The process by which experiences are encoded, stored, and later retrieved in the brain, contributing to learning and the continuity of personal identity.

H. M.

Henry Molaison, a patient who contributed significantly to the understanding of memory after undergoing a surgery that left him with profound amnesia.

Proactive Interference

The disruptive effect of previously learned material on the recall of newer material.