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Shooting Star Books i




Shooting Star Books is a small publishing company that specializes in science fiction books.;Like most publishers, Shooting Star releases new books in hardcover form and later releases;paperback versions of the books. The marginal cost of printing both types of books is $2 per book;and Shooting Star maximizes profits by practicing intertemporal price discrimination. The annual;demand for recently released (hardcover) books is Q1=400-10P1, where quantity demanded is;measured in thousands of books and price is measured in dollars per book. The annual demand;for the paperback version of previously released books is Q2=800-40P2;a. What are the marginal revenue curves associated with the two demand curves for books?;b. What are the profit maximizing prices for hardcover and paperback books? What are the;quantities of books demanded at these prices for hardcover and paperback books?;c. Suppose the market demand for paperback books shifts to How does this;change affect the profit maximizing price and quantity in the paperback book market?;d. Does this change affect the profit maximizing outcome in the hardcover book market?;Additional Requirements;Level of Detail: Show all work


Paper#15370 | Written in 18-Jul-2015

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