The Quantity Demanded Each Month of the Walter Serkin Recording

question 49

Multiple Choice

The quantity demanded each month of the Walter Serkin recording of Beethoven's Moonlight Sonata, manufactured by Phonola Record Industries, is related to the price/compact disc. The equation , where p denotes the unit price in dollars and x is the number of discs demanded, relates the demand to the price.
The total monthly cost (in dollars) for pressing and packaging x copies of this classical recording is given by .
To maximize its profits, how many copies should Phonola produce each month? Hint: The revenue is , and the profit is .

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Definitions:

Sales Manager

A sales manager is responsible for leading and guiding a team of salespeople in an organization.

Economics Consultants

professionals or firms that provide expert advice and analysis on economic trends, policies, and conditions to businesses, governments, or other organizations.

Elasticity Of Demand

A measure of how sensitive the quantity demanded of a good is to a change in its price.

Luxury Good

A good for which demand increases more than proportionally as income rises, in contrast to a "necessity good," for which demand is not related to income.