The El Dorado Star is the only newspaper in El Dorado, New Mexico. Certainly, the Star competes with The Wall Street Journal, USA Today, and the New York Times for national news reporting, but the Star offers readers stories of local interest, such as local news, weather, high-school sporting events, and so on. The El Dorado Star faces the revenue and cost schedules shown in the spreadsheet that follows:
Since we are using dollars and cents, be sure to go out two decimal places on your calculations. Add columns to show, respectively, marginal cost (MC), marginal revenue (MR), and total profit.
Number of newspapers per day (Q)
Total revenue (including advertising revenues) per day (TR)
Total cost per day (TC)
0
0
3500
1000
3250
3600
2000
4250
3700
3000
4750
3860
4000
5000
4020
5000
5200
4300
6000
5375
4500
7000
5400
4590
8000
5375
4810
9000
5225
5050
The El Dorado Star is the only newspaper in El Dorado, New Mexico. Certainly, the Star competes with The Wall Street Journal, USA Today, and the New York Times for national news reporting, but the Star offers readers stories of local interest, such as local news, weather, high-school sporting events, and so on. The El Dorado Star faces the revenue and cost schedules shown in the spreadsheet that follows:
Since we are using dollars and cents, be sure to go out two decimal places on your calculations. Add columns to show, respectively, marginal cost (MC), marginal revenue (MR), and total profit.
| Number of newspapers per day (Q) | Total revenue (including advertising revenues) per day (TR) | Total cost per day (TC) |
| 0 | 0 | 3500 |
| 1000 | 3250 | 3600 |
| 2000 | 4250 | 3700 |
| 3000 | 4750 | 3860 |
| 4000 | 5000 | 4020 |
| 5000 | 5200 | 4300 |
| 6000 | 5375 | 4500 |
| 7000 | 5400 | 4590 |
| 8000 | 5375 | 4810 |
| 9000 | 5225 | 5050 |
Related textbook solutions
Related questions
| Number of newspapers per day (Q) | Total revenue (including advertising revenues) per day (TR) | Total cost per day (TC) | Marginal Revenue (MR) | Marginal Cost (MC) | Total Profit |
| 0 | 0 | 3500 | $ - | $ - | $ (3,500.00) |
| 1000 | 3250 | 3600 | $ 3.25 | $ 0.10 | $ (350.00) |
| 2000 | 4250 | 3700 | $ 1.00 | $ 0.10 | $ 550.00 |
| 3000 | 4750 | 3860 | $ 0.50 | $ 1.60 | $ 890.00 |
| 4000 | 5000 | 4020 | $ 0.25 | $ 1.60 | $ 980.00 |
| 5000 | 5200 | 4300 | $ 0.20 | $ 0.28 | $ 900.00 |
| 6000 | 5375 | 4500 | $ 0.18 | $ 0.20 | $ 875.00 |
| 7000 | 5400 | 4590 | $ 0.03 | $ 0.09 | $ 810.00 |
| 8000 | 5375 | 4810 | $ (0.03) | $ 0.22 | $ 565.00 |
| 9000 | 5225 | 5050 | $ (0.15) | $ 0.24 | $ 175.00 |
Q6) What is total fixed cost ?
Q7) If Star's total fixed costs were to DOUBLE for some reason, how much profit (or loss) does Star make when fixed costs are doubled?
Q8) Given your answer in #7, should the Star shut down, why or why not? If they should continue to produce, how many papers should they produce? Explain your choice in 25-50 words.
| Number of newspapers per day (Q) | Total revenue (including advertising revenues) per day (TR) | Total cost per day (TC) | Marginal Revenue (MR) | Marginal Cost (MC) | Total Profit |
| 0 | 0 | 3500 | $ - | $ - | $ (3,500.00) |
| 1000 | 3250 | 3600 | $ 3.25 | $ 0.10 | $ (350.00) |
| 2000 | 4250 | 3700 | $ 1.00 | $ 0.10 | $ 550.00 |
| 3000 | 4750 | 3860 | $ 0.50 | $ 0.16 | $ 890.00 |
| 4000 | 5000 | 4020 | $ 0.25 | $ 0.16 | $ 980.00 |
| 5000 | 5200 | 4300 | $ 0.20 | $ 0.28 | $ 900.00 |
| 6000 | 5375 | 4500 | $ 0.18 | $ 0.20 | $ 875.00 |
| 7000 | 5400 | 4590 | $ 0.03 | $ 0.09 | $ 810.00 |
| 8000 | 5375 | 4810 | $ (0.03) | $ 0.22 | $ 565.00 |
| 9000 | 5225 | 5050 | $ (0.15) | $ 0.24 | $ 175.00 |
3) How many papers should the manager print and sell daily? Explain your choice in 25 - 50 words.
4) how much profit (or loss) will they earn at the level of output you chose in #3?
5) At the profit-maximizing output level you reported in question 3, are they making the greatest possible amount of total revenue? Explain in 50-100 words why or why not.
