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Microeconomics

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Market Surplus: Come on, Just Publish Already!

MICRO-EBEY4O

Popular fantasy author Gary T.D. Harrison is the author of the book series Dance of Wind and Rain. He is working on the next volume of the series, and is deciding how long to make the book.

Readers of the series in general prefer longer books, although the marginal value of an additional chapter is still declining in the number of pages. There are 1,000 readers who will purchase the book when it comes out. Each reader puts a valuation of 10 on receiving the book in general, and their marginal benefit each additional chapter is:

$$MB = 22.2 - Q$$

Where $Q$ is the number of chapters in the book.

Longer books are also more expensive to produce, since the publisher has to pay for more pages to be printed. The marginal cost of putting an additional chapter is 1 per book copy produced.

In addition, Gary T.D. Harrison has to work harder to write longer books. His marginal cost of writing per chapter is:

$$MC = 1000 + 10Q$$