Author A accepts a $5,000 advance from a publisher and a 10% royalty after 5,000 books are sold. Author B foregoes the publisher's advance and negotiates for a 15% royalty on all books sold. Author C decides to self-publish his book and keep 100% of all sales revenue. Which of these authors expects to sell the fewest books?
A)Author A
B)Author B
C)Author C
D)They are all equally likely.

Question

Quizplus · Accepted Answer

Author A's royalty only kicks in after 5,000 books are sold, so if they don't reach that number, they won't earn any additional revenue beyond the advance. Meanwhile, Author B's higher royalty rate means they will earn more per book sold, so they may have a greater incentive to promote and sell their book. Author C has the potential to earn the most money per book sold, but they also bear the full responsibility and cost of self-publishing and promoting their book, which may limit their reach and sales.

Author a Accepts a $5,000 Advance from a Publisher and a 10