2 Assume two book producers, Bookworm and Bookia are allowed to sell books in a fair. They may either choseto bring 500 books or 1000 books to the fair. Assume demand for books in the fair is presented on the tablebelow. Assume for each company the average cost of producing a new book is negligible. (For example, it mightbe 1$) Answer the questions accordingly.P100908070605040302010Q2505007501000125015001750200022502500a) Find what will be the revenue of the companies when each produces 500 books? What will be their revenuewhen each produces 1000 books? Find what will be the revenue of the companies, when Bookworm produces500 books and Bookia produces 1000 books? Find what will be the revenue of the companies, when Bookiaproduces 500 books and Bookworm produces 1000 books?b) Draw a payoff matrix showing the revenue of each company for all cases described in part a and part b. Howmany books will each company bring to the fair, if when deciding how many books to bring, each one companyjust try to increase their individual revenue they get from the fair to the maximum possible level?

As per the law of demand price and quantity demanded are inverse to each other which is visible from…

ssume two book producers, Bookworm and Bookia are allowed to sell books in a fair. They may either cho to bring 500 books or 1000 books to the fair. Assume demand for books in the fair is presented on the table below. Assume for each company the average cost of producing a new book is negligible. (For example, it m De 1$) Answer the questions accordingly. P 100 90 80 Q 250 500 750

ssume two book producers, Bookworm and Bookia are allowed to sell books in a fair. They may either cho to bring 500 books or 1000 books to the fair. Assume demand for books in the fair is presented on the table below. Assume for each company the average cost of producing a new book is negligible. (For example, it m De 1$) Answer the questions accordingly. P 100 90 80 Q 250 500 750

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 3P

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