According to the article

According to the article

According to the article in the Time magazine (October 4th 2012), ?Millions on Pet HalloweenCostumes? Why We Spend More and More on Pets?, American consumers were expected tospend $370 million on pet costumes for the 2012 Halloween. According to the same source, notonly were more people purchasing Halloween costumes for their dogs?there?s been a 24%increase since 2010?but they were spending much, much more per costume, with a rise of 40%in overall spending in two years.Suppose that you read this article published on Time Magazine and have decided to publish amagazine on costumes for pets. There are no other magazines in the market specialized on thissubject.Let the inverse demand curve for your magazine?s subscriptions be represented by), whereis the price of a subscription. The magazine?s marginal cost per subscription is constant at M (primarily printing, paper and mailing), and its fixed cost is(officespace, and payments to its editorial staff, authors, and photographers).a) Are you a price taker or a price maker in the advertising market? Explain.b) Assume that the advertising market determines that you chargefor an ad, whereis theprice per unit of circulation that is set by the advertising market. Suppose also that the n firms that produce costumes for dogs are each willing to place one ad per issue if the price isIllustrate graphically the effects of Advertising Sales on your magazine?s price per subscriptionand number of subscriptions sold per year. Discuss your graph and set up mathematically your profit function. You are required to explain your profit function as well.

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