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.”...

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.