1. A publisher faces the following demand schedule for the next novel from one of its popular authors:

Price ($) 100 90 80 70 60 50 40 30 20 10 0

The author is paid $2 million t write the book, and the marginal cost of producing the book is a constant $10 per book. a. Compute:

Quantity Demand 0 V. 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000

i) what is the total revenue at each quantity
ii) Total cost at each quantity Profit at each quantity.
iii) What quantity would a profit-maximizing publisher choose?
v) What price would it charge?

b) Compute marginal revenue. How does marginal revenue compare to the price? Explain.

c) Graph the marginal-revenue, marginal-cost, and demand curves. At what quantity does the marginal-revenue and marginal-cost curves cross? What does this signify?

d) In your graph, shade in the deadweight loss. Explain in words what this means.

e) Suppose the publisher was not profit-maximizing but was concerned with maximizing economic efficiency. What price would it charge for the book? How much profit would it make at this price?​