You decide to start selling a popular economics textbook at Clemson. It costs yo
ID: 1157147 • Letter: Y
Question
You decide to start selling a popular economics textbook at Clemson. It costs you $50 to setup a website to sell books, and you have pay (in time & money) each prior owner of a textbook $5 more to part with their beloved text (i.e. the cost of each book increases by $5 for each book). Assume the textbook market is competitive and the books sell for $30.
Filling in this table should help with the following questions.
For the eighth book enter all values (do not include dollar signs):
Total Revenue: $ .
Total Cost: $ .
Profits: $ .
Marginal Revenue: $ .
Marginal Cost: $ .
Change in Profit: $ .
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How many books do you choose to sell? book(s)
What is your economic profit? $ .
Textbooks Total Total Cost Profits Marginal Marginal Change in Revenue Revenue Cost Profit 0 4 5 6 7 8 10Explanation / Answer
For 8th text book
Total revenue=price×quantity=30×8=240
Total cost=70 becuase the marginal cost is 5 then the each increase in cost concludes total cost as 70
Profit=Total revenue - Total cost = 240-70=170
marginal revenue=current TR - previous TR = 240-210=30
Economic cost =total revenue -(implicit cost + explicit cost)
CHANGE IN PROFIT = present quantity profit- previous quantity profit =170 -145=25
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