You are a newspaper publisher. You are in the middle of a one-year rental contract for your factory that requires you to pay $700,000 per month, and you have contractual labour obligations of $1,000,000 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 $0.1 per paper. a. If sales fall by 20 percent from 1,000,000 papers per month to 800,000 papers per month, what happens to the average fixed cost per paper and to the marginal cost per paper? Instructions: Round your answers to two decimal places. Average fixed cost per paper (Click to select) from $1 per paper to $ per paper
You are a newspaper publisher. You are in the middle of a one-year rental contract for your factory that requires you to pay $700,000 per month, and you have contractual labour obligations of $1,000,000 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 $0.1 per paper. a. If sales fall by 20 percent from 1,000,000 papers per month to 800,000 papers per month, what happens to the average fixed cost per paper and to the marginal cost per paper? Instructions: Round your answers to two decimal places. Average fixed cost per paper (Click to select) from $1 per paper to $ per paper
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.7P
Related questions
Question
Please answer the whole thing
Thanks
![You are a newspaper publisher. You are in the middle of a one-year rental contract
for your factory that requires you to pay $700,000 per month, and you have
contractual labour obligations of $1,000,000 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 $0.1 per paper.
a. If sales fall by 20 percent from 1,000,000 papers per month to 800,000 papers
per month, what happens to the average fixed cost per paper and to the marginal
cost per paper?
Instructions: Round your answers to two decimal places.
Average fixed cost per paper (Ciek to select) from $1
per paper to $
per paper.
Marginal cost per paper (Click to select)
b. What happens to the minimum amount that you must charge to break even on
these costs?
Instructions: Round your answers to two decimal places.
The amount (Click to select)
from $
per paper to $
per paper.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0f33c416-6e69-4b5b-9e18-3d26a6d98a6d%2F3d48da12-4f4f-43ac-9b8c-a38e1e382a8e%2Fbzf7aa9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:You are a newspaper publisher. You are in the middle of a one-year rental contract
for your factory that requires you to pay $700,000 per month, and you have
contractual labour obligations of $1,000,000 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 $0.1 per paper.
a. If sales fall by 20 percent from 1,000,000 papers per month to 800,000 papers
per month, what happens to the average fixed cost per paper and to the marginal
cost per paper?
Instructions: Round your answers to two decimal places.
Average fixed cost per paper (Ciek to select) from $1
per paper to $
per paper.
Marginal cost per paper (Click to select)
b. What happens to the minimum amount that you must charge to break even on
these costs?
Instructions: Round your answers to two decimal places.
The amount (Click to select)
from $
per paper to $
per paper.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![ECON MICRO](https://www.bartleby.com/isbn_cover_images/9781337000536/9781337000536_smallCoverImage.gif)
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
![ECON MICRO](https://www.bartleby.com/isbn_cover_images/9781337000536/9781337000536_smallCoverImage.gif)
![Principles of Economics 2e](https://www.bartleby.com/isbn_cover_images/9781947172364/9781947172364_smallCoverImage.jpg)
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
![Microeconomics: Private and Public Choice (MindTa…](https://www.bartleby.com/isbn_cover_images/9781305506893/9781305506893_smallCoverImage.gif)
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
![Economics: Private and Public Choice (MindTap Cou…](https://www.bartleby.com/isbn_cover_images/9781305506725/9781305506725_smallCoverImage.gif)
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning