Question

Suppose that in the early part of a new book’s life, sales drop by 15% to 20% each term, as the pool of used books on the market grows. This is because after being on the market, the latest edition of a given textbook will have made its way into the used textbook market, giving many students the opportunity to move from new textbooks toward used ones. As the supply of used textbooks increases, the price of used textbooks decreases, and thus the expected resale value for new textbooks declines. Suppose the publisher still plans to charge the same price of $140 per new copy of the textbook between editions.

Answer 1

Obviously my answer is different but this should help with gaining your answer.So if your question is $40 for the ebook, place the green rectangle and drag until it hits the demand curve. It looks like from your graph it should hit about 150,000 copies.

40 x 150,000 = $6,000,000 worth of revenue. For the textbook, $140/book, your graph should hit 10,000(? hard to see). So $140 x 10,000 = $1,400,000 is generated in revenue for the textbook.