You estimate that the annual cost of this business will be as
follows:
Technology (Web design and maintenance)
$5,000
Postage and handling
$1,000
Miscellaneous
$3,000
Inventory of cookbooks
$2,000
Equipment
$4,000
Overhead
$1,000
You must give up your full-time job, which paid $50,000 per year, and you
worked part-time for half of the year.
The average retail price of the cookbooks will be $30, and their average cost
will be $20.
Assume that the equation for demand is Q = 10,000 – 9,000P, where
Q = the number of cookbooks sold per month
P = the retail price of books.
Show what the demand curve would look like if you sold the books between $25
and $35.
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