#3 CheYou are a newspaper publisher. You are in the middle of a one-year rental contract for your factory that requires you to pay $700,000per month, and you have contractual labor obligations of $1,250,000 per month that you can't get out of. You also have a marginalprinting cost of $0.35 per paper as well as a marginal delivery cost of $0.10 per paper.Instructions: Round your answers to 2 decimal places.a. If sales fall by 20 percent from 1,000,000 papers per month to 800,000 papers per month, what happens to the AFC per paper?Itfromper paper toper paper.b. What happens to the MC per paper?< Prev3 of 11Next >

The cost refers to money made made by the firm for the purchase of any good or service used during…

You are a newspaper publisher. You per month, and you have contractua printing cost of $0.35 per paper as v Instructions: Round your answers ta a. If sales fall by 20 percent from 1,0 It from b. What happens to the MC per pap

You are a newspaper publisher. You per month, and you have contractua printing cost of $0.35 per paper as v Instructions: Round your answers ta a. If sales fall by 20 percent from 1,0 It from b. What happens to the MC per pap

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter21: Costs And The Supply Of Goods

Section: Chapter Questions

Problem 16CQ

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Question

Che
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 labor 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: Round your answers to 2 decimal places.
a. If sales fall by 20 percent from 1,000,000 papers per month to 800,000 papers per month, what happens to the AFC per paper?
It
from
per paper to
per paper.
b. What happens to the MC per paper?
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You are a newspaper publisher. You are in the middle of a one-year rental contract for your factory that requires you to pay $600,000 per month, and you have contractual labor 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: Round your answers to 2 decimal places. c. What happens to the minimum amount that you must charge to break even on these costs? It increases from $...........per paper to $2.76. what is the price for paper?
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