Marvin Publishing's best selling account is for graduate economics textbooks. The product's price is determined by the market (demand and supply). The current market price is taken by Marvin as $50 per book. The production cost is given as: Total cost = 350 - 10Q +2Q^2 where Q is the volume of output in thousands (000). [Note that the equation is three hundred and fifty minus ten Q plus two Q squared] Marginal cost = -10 +4Q and Marginal Revenue = Price = $50 Managers at Marvin Publishing hold themselves responsible for producing the volume at which the company makes the most profit or incurs the least loss. Use the information above to solve the following: 1. What volume of output should Marvin produce to maximize profit and what will the profit be at this level of output? (10points) 2. A rival publisher has reduced the price of its best-selling economics text by $15 and is selling the text books for $30. Marvin is considering the option of exactly matching this price reduction and so preserve his level of sales. Do you endorse this price decrease? (Briefly explain quantitatively why or why not.) (5points) 3. To save significantly on fixed costs, Marvin Publishing plans to contract out the actual printing of its textbooks to outside vendors. The firm now expects to pay a somewhat higher printing cost per book (than is described above) from the outside vendor (who marks up the price above its cost to make a profit). How would outsourcing affect the above output and pricing decisions?