A Textbook Publisher Is in Monopolistic Competition

question 281

Multiple Choice

A textbook publisher is in monopolistic competition. The firm 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. What is the firm's maximum economic profit?

• A) zero
• B) $800
• C) -$400
• D) $1,000

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Definitions:

Neocortex

Most recently expanded outer layer (“new bark”) of the forebrain, composed of about six layers of gray matter. Its name is a misnomer, as it actually isn’t newer because it arose at the same time during evolution as other forms of cortex. It is also called isocortex because it is almost always six-layered, with few exceptions.

Fritsch and Hitzig

Fritsch and Hitzig were pioneering neuroscientists known for their research demonstrating the electrical excitability of the cerebral cortex.

Electrical Potential

The amount of electric potential energy per unit charge at a specific point in an electric field, influencing the movement of charged particles.

Electric Charge

A physical property of matter that causes it to experience a force when placed in an electromagnetic field, fundamental to electricity.