-Refer to Figure 9.2.Whenever a CD is sold,5% of the sale goes to the artist and the remainder of the revenue goes to the record company.The graph above depicts this with R being the total revenue from sales,(0.95)R being the record company's share less the 5% given to the artist and C being the cost of producing the CD.At what quantity would the artist prefer to produce the CD?
A) 0
B) Q1
C) Q2
D) Q3

Question

-Refer to Figure 9.2.Whenever a CD is sold,5% of the sale goes to the artist and the remainder of the revenue goes to the record company.The graph above depicts this with R being the total revenue from sales,(0.95)R being the record company's share less the 5% given to the artist and C being the cost of producing the CD.At what quantity would the artist prefer to produce the CD?
A) 0 
B) Q1 
C) Q2 
D) Q3

Quizplus · Accepted Answer

The artist prefers to produce the CD at Q2 because that is the quantity at which the artist's share of the revenue is maximized.