Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 9, Problem 3P
To determine
Change in the average fixed cost, marginal cost and breakeven price.
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Let's explore how rising costs helped to kill off most printed newspapers after the Internet became available in the mid-1990s. Imagine
that you are a newspaper publisher in the year 2004. You are in the middle of a one-year factory rental contract that requires you to
pay $700,000 per month, and you have contractual salary obligations of $1,250,000 per month that you can't get out of. You also have
a marginal printing cost of $0.35 per paper as well as a marginal delivery cost of $0.10 per paper.
Instructions: Enter your answers rounded to two decimal places.
a. If sales fall by 20 percent from 1,000,000 newspapers per month to 800,000 newspapers per month, what happens to the AFC per
newspaper?
AFC per newspaper (Click to select) : from $
b. What happens to the MC per newspaper?
MC per newspaper (Click to select) ÷
c. What happens to the minimum amount that you must charge to break even?
It (Click to select) : from $
to $
You are a newspaper publisher. You are in the middle of a oneyear rental contract for your factory that requires you to pay $500,000 per month, and you have contractual labor obligations of $1 million per month that you can’t get out of. You also have a marginal printing cost of $0.25 per paper as well as a marginal delivery cost of $0.10 per paper. If sales fall by 20 percent from 1 million papers per month to 800,000 papers per month, what happens to the AFC per paper, the MC per paper, and the minimum amount that you must charge to break even on these costs?
You are a newspaper publisher. You are in the middle of a one-year factory rental contract that requires you to pay $500,000 per
month, and you have contractual salary obligations of $1,250,000 per month that you can't get out of. You also have a marginal
printing cost of $0.25 per paper as well as a marginal delivery cost of $0.10 per paper.
Instructions: Enter your answers rounded to two decimal places.
a. If sales fall by 20 percent from 1,000,000 newspapers per month to 800,000 newspapers per month, what happens to the AFC per
newspaper?
AFC per newspaper (Click to select) v from $
to $
b. What happens to the MC per newspaper?
MC per newspaper (Click to select) v
c. What happens to the minimum amount that you must charge to break even?
It (Click to select) v from $
to $
Chapter 9 Solutions
Microeconomics
Ch. 9.2 - Prob. 1QQCh. 9.2 - Prob. 2QQCh. 9.2 - Prob. 3QQCh. 9.2 - Prob. 4QQCh. 9.5 - Prob. 1QQCh. 9.5 - Prob. 2QQCh. 9.5 - Prob. 3QQCh. 9.5 - Prob. 4QQCh. 9.8 - Prob. 1QQCh. 9.8 - Prob. 2QQ
Ch. 9.8 - Prob. 3QQCh. 9.8 - Prob. 4QQCh. 9 - Prob. 1DQCh. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - Prob. 4DQCh. 9 - Prob. 5DQCh. 9 - Prob. 6DQCh. 9 - Prob. 7DQCh. 9 - Prob. 8DQCh. 9 - Prob. 1RQCh. 9 - Which of the following are short-run and which are...Ch. 9 - Prob. 3RQCh. 9 - Indicate how each of the following would shift the...Ch. 9 - Prob. 5RQCh. 9 - Prob. 6RQCh. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4P
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