ECONOMICS

Author are typically paid a royality which is a fixed percentage of revenue; a common figure 10% of sales revenue. Show that the price desired by an author is always less than the price desired by a profit maximising publisher. What is the elasticity of demand at the price desired by the author?

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asked by ZIO
  1. Take a shot, what do you think?
    Hint: does an author have marginal costs? Does a publisher have marginal costs?

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