Suppose Campus Books, a Profit-Maximizing Firm, Is the Only Supplier

question 125

Multiple Choice

Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class. The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed costs. The table shows the reservation prices of the eight students enrolled in the class.  
$$\begin{array} { | c | c | } \hline \text { Custamer } & \begin{array} { c } \text { Reservutian Price } \\\text { (S/Bank) }\end{array} \\\hline \mathrm { Q } & 60 \\\hline \mathrm { R } & 54 \\\hline \mathrm { S } & 48 \\\hline \mathrm { T } & 42 \\\hline \mathrm { U } & 36 \\\hline \mathrm { V } & 30 \\\hline \mathrm { W } & 24 \\\hline \mathrm { X } & 18 \\\hline\end{array}$$ What price will Campus Books charge if it must charge a single price to all of its customers?

• A)$36
• B)$18
• C)$24
• D)$10

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Definitions:

Revenue Account

An account that tracks the income earned by a company from its normal business operations, excluding expenses.

Debit

The left side of an account.

Credit

An accounting entry that increases a liability or equity account, or decreases an asset or expense account, represented on the right side of the ledger.

Closing Entry Process

The accounting procedure used at the end of an accounting period to transfer balances from temporary accounts to permanent accounts.