Question

Augi is the hottest new pop singer, but her agent discovers that Internet sales of Augi's music have been poor due to Internet piracy. However, concerts are regularly sold out and merchandise (such as T-shirts) sells well. If Augi wants to enhance profits, economists would most likely recommend that she:

Answer 1

Answer:

The correct answer is letter "C": keep prices of downloads low and raise prices for concerts and merchandise.

Explanation:

To maximize profits, Augi's agent should not stop doing any of the commercial activities the pop singer has been carrying out. However, a way to deal with Augi's music internet piracy, the agent could lower the online-song prices but the "losses" can be compensated by raising the concert ticket prices and the singer's merchandise sold there since most of Augi's concerts are sold-outs.