If I understand your question, you only need the $2 million once. Count the number of books X $10.00 for the publishing cost. Then to determine what he made, gross, compute what he would have made if he sold all the books. Once you have the total cost plus what he was given to write the book, it should be easy to figure out the total profit.
Sra
I put this question on the board before. What I am not clear on is if I should consider the $2 million once when I doing the calculations?
Qestion:
A publisher faces the following demand shedule for the next novel of one of its popular authors.
Price________Quantity Demanded
$100_________0
$90__________100,000
$80__________200,000
$70__________300,000
$60__________400,000
$50__________500,000
$40__________600,000
$30__________700,000
$20__________800,000
$10__________900,000
$0___________1,000,000
The author is paid $2 million to write the book, and the marginal cost of publishing the books is a constant $10 per book.
Compute total revenue, total cost, and profit at each quantity.
I understand the $2 millon is a fixed cost. Do I just use it just once or do I use to for the calculations for each quantity?
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