The demand for Professor Bongmore's new book is given by the function Q  6,000  100p.If the cost of having the book edited and typeset is $18,000, if the marginal cost of printing an extra copy is $4, and if he has no other costs, then he would maximize his profits by

A) having it edited and typeset and selling 2,800 copies.
B) not having it edited and typeset and not selling any copies.
C) having it edited and typeset and selling 5,600 copies.
D) having it edited and typeset and selling 3,000 copies.
E) having it typeset and selling 1,400 copies.

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DeAnna Barrera · Accepted Answer

Final Answer : A, Explanation :  To maximize profits, Professor Bongmore should consider both fixed costs (editing and typesetting) and variable costs (printing). The demand function suggests that the quantity demanded decreases as the price increases. The fixed cost is $18,000, and the marginal cost of printing an extra copy is $4. Given these costs, selling 2,800 copies balances the need to cover fixed costs and the marginal cost per unit while maximizing revenue from sales, as indicated by the demand function. Choices B, C, D, and E either do not account for the fixed costs properly or do not optimize the balance between cost and revenue as effectively as selling 2,800 copies does.

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