Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class. The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed costs. The table shows the reservation prices of the eight students enrolled in the class.
$$\begin{array} { | c | c | }
\hline \text { Custamer } & \begin{array} { c }
\text { Reservutian Price } \
\text { (S/Bank) }
\end{array} \
\hline \mathrm { Q } & 60 \
\hline \mathrm { R } & 54 \
\hline \mathrm { S } & 48 \
\hline \mathrm { T } & 42 \
\hline \mathrm { U } & 36 \
\hline \mathrm { V } & 30 \
\hline \mathrm { W } & 24 \
\hline \mathrm { X } & 18 \
\hline
\end{array}$$ If Campus Books is permitted to charge 2 prices, and the bookstore knows customers with a reservation price above $30 never bother with coupons, whereas those with a reservation price of $30 or less always use them, then how many in total books will the bookstore sell?
A)8
B)7
C)6
D)5

Question

Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class. The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed costs. The table shows the reservation prices of the eight students enrolled in the class.  
$$\begin{array} { | c | c | } 
\hline \text { Custamer } & \begin{array} { c } 
\text { Reservutian Price } \
\text { (S/Bank) }
\end{array} \
\hline \mathrm { Q } & 60 \
\hline \mathrm { R } & 54 \
\hline \mathrm { S } & 48 \
\hline \mathrm { T } & 42 \
\hline \mathrm { U } & 36 \
\hline \mathrm { V } & 30 \
\hline \mathrm { W } & 24 \
\hline \mathrm { X } & 18 \
\hline
\end{array}$$ If Campus Books is permitted to charge 2 prices, and the bookstore knows customers with a reservation price above $30 never bother with coupons, whereas those with a reservation price of $30 or less always use them, then how many in total books will the bookstore sell?
A)8
B)7
C)6
D)5

Quizplus · Accepted Answer

Campus Books can set one price for customers with a reservation price above $30 (customers Q, R, S, T, U) and a different price for those with a reservation price of $30 or less (customers V, W, X), knowing the latter will use coupons. Since the marginal cost is $10 and all customers have a reservation price above this cost, the bookstore will sell to all customers whose reservation price exceeds the marginal cost. Therefore, all 8 customers will buy the book because even the lowest reservation price ($18) is above the marginal cost.

Suppose Campus Books, a Profit-Maximizing Firm, Is the Only Supplier