A new musical group called The Incentives cuts a debut single.

QUESTION

A
new musical group called The Incentives cuts a debut single. The record company
determines a number of price points for the group’s first single, “The Big
Idea.”
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The
record company can produce the song with fixed costs of $10,000 and no variable
cost.

Part
1
Calculate
the total revenue and marginal revenue at each quantity. At a price of P
=
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$ ,
the firm maximizes profits.

Part
2
The
company makes a total profit of
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$ .

Part
3
If
you were the agent for The Incentives, you would request a signing fee no more
than

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Choose
one:

A.
$200,000.

B.
$150,000.

C.
$100,000.

D.
$50,000.

E.
$0.

ANSWER:

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