Professor Kremepuff Has Published a New Textbook

question 20

Multiple Choice

Professor Kremepuff has published a new textbook.This book will be used in classes for two years, at which time it will be replaced by a new edition.The publisher charges a price of $p₁ in the first year and $p₂ in the second year.After the first year, bookstores buy back copies from students for $p₂/2 and resell them to students in the second year for $p₂.(Students are indifferent between new and used copies.) The cost to a student in the first year of owning the book for a year is therefore $(p₁ - p₂/2) .In the first year of publication, the number of students willing to pay $v to own the book for a year is 40,000 - 1,000v.The number of students taking the course in the first year who are willing to pay at least $w to keep the book for reference rather than resell it is 40,000 - 5,000w.In the second year, the number of students who have not previously taken the course and are willing to pay at least $p for a copy of the book is 30,000 - 1,000p.If the publisher sets a price of $p₁ in the first year and $p₂ in the second year, with p₁ B3 p₂, then the total number of copies that the publisher sells over two years will be equal to

• A)80,000 - 3,000p₂.
• B)80,000 - 1,000(p₁ - p₂/2).
• C)80,000 - 1,000p₁ - 1,000p₂.
• D)70,000 -1,000(p₁ - p₂/2).
• E)70,000 -1,500p₂.