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Johnny Rockabilly has just finished recording his latest
Chapter , Problem 3(choose chapter or problem)
Johnny Rockabilly has just finished recording his latest CD. His record companys marketing department determines that the demand for the CD is as follows:Price Number of CDs$2410,0002220,0002030,0001840,0001650,0001460,000The company can produce the CD with no fixed cost and a variable cost of $5 per CD.a.Find total revenue for quantity equal to 10,000, 20,000, and so on. What is the marginal revenue for each 10,000 increase in the quantity sold?b.What quantity of CDs would maximize profit? What would the price be? What would the profit be?c.If you were Johnnys agent, what recording fee would you advise Johnny to demand from the record company? Why?
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QUESTION:
Johnny Rockabilly has just finished recording his latest CD. His record companys marketing department determines that the demand for the CD is as follows:Price Number of CDs$2410,0002220,0002030,0001840,0001650,0001460,000The company can produce the CD with no fixed cost and a variable cost of $5 per CD.a.Find total revenue for quantity equal to 10,000, 20,000, and so on. What is the marginal revenue for each 10,000 increase in the quantity sold?b.What quantity of CDs would maximize profit? What would the price be? What would the profit be?c.If you were Johnnys agent, what recording fee would you advise Johnny to demand from the record company? Why?
ANSWER:Step 1 of 4
A firm's profit is maximized when the difference between the total revenue generated by the firm and the total cost incurred by the firm is the highest. The profit-maximizing point differs across various market structures.