Microeconomics Help Please?

Question

Microeconomics Help Please?

Johnny Rockabily has just finished recording a cd. The demand for the CD is as follows:

$24 10,000

22 20,000

20 30,000

18 40,000

16 50,000

14 60,000

There is no fixed cost and a variable cost of $5 per cd.

A: Find Total Revenue, Marginal Revenue, Total Cost, Marginal Cost, and Profit for each price/quantity demanded.

B: What quantity would max profit? What would the price be? What would profit be?

C: What recording fee woould you advise Johhny to demand from the record company & Why?

I made a chart with all of the info for Part A. For part B, should I just use the Price/Quantity from Part A, or do I need to graph it and find where Price=Marginal Cost (since it's a monopoly). What is confusing me about graphing it is the combination of large numbers in the tens of thousands combined with small numbers of the prices. Lastly, I have no clue how to answer Part C. What would charging a fee do?

Thanks for your time.

Answer 1

revenue will be quanity x price. find profit by taking revenue minus the cost. Cost is $5 x the quantity produced.

The large number is the # of CDs produced. The more produced, the lower the cost according to supply/demand law.

as for C. Check out different ways to charge where he would get more money. Check maybe a % of revenue or a fee per CD. Make a chart.