The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 5

The photocopy machine in the library costs $295 per month to rent. The rental fee covers repair service, toner, developer, and 20,000 copies per month. The library also pays 1 cent for every copy beyond 20,000, plus 1/2 cent for every sheet of paper used. Harriet Martineau has to read a 20-page journal article for tomorrow's class. She is willing to pay 50 cents for a photocopy of the article, but she will read it in the library if she has to pay more than that.
(a) What is the highest price per page Harriet will be willing to pay to use the copier?
(b) What is the lowest price per page the library should be willing to accept? What additional information must you have in order to answer?
(c) Harriet just found out she is supposed to read a second article for tomorrow's class, an article full of complex graphs. Harriet badly wants her own copy of this article and will pay whatever she has to pay to get one. What is now the highest price Harriet will be willing to pay to use the library copier? (You must supply some information from your own experience to answer.)
(d) How does the $295 monthly rental fee affect the price the library will want to charge users of its copier?