A Textbook Publisher Is in Monopolistic Competition

question 22

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 price per book is

• A)$40.
• B)$50.
• C)$60.
• D)$70.
• E)$20.

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Definitions:

Starting a Career

The initial phase of entering the workforce or professional field, which encompasses choosing a profession, acquiring the necessary education or skills, and securing the first job or position in the chosen field.

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The act of changing one’s residence or place of business; involves packing, transporting, and unpacking personal belongings or equipment.

Relativistic

Pertaining to the concept that points of view have no absolute truth or validity, being dependent instead on the perspectives and contexts from which they arise.

Reflective

Characterized by deep thought and careful consideration, often leading to insights about oneself or the world.