Question

Create a new spreadsheet in which total fixed cost increases to $5,000. What price should the manager charge? How many papers should be sold in the short run?

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	profit mar	price	TFC
0	0	2500			-2,500.00	0	0	-
1000	4000	2600	4.00	0.10	1,400.00	(2,596.00)	4.00	2,500.00
2000	5000	2700	1.00	0.10	2,300.00	(2,698.00)	2.50	2,500.00
3000	5500	2860	0.50	0.16	2,640.00	(2,858.00)	1.83	2,500.00
4000	5750	3020	0.25	0.16	2,730.00	(3,019.00)	1.44	2,500.00
5000	5950	3200	0.20	0.18	2,750.00	(3,198.00)	1.19	2,500.00
6000	6125	3390	0.18	0.19	2,735.00	(3,389.00)	1.02	2,500.00
7000	6225	3590	0.10	0.20	2,635.00	(3,589.00)	0.89	2,500.00
8000	6125	3810	-0.10	0.22	2,315.00	(3,809.00)	0.77	2,500.00
9000	5975	4050	0.24	0.24	1,925.00	(4,049.00)	0.66	2,500.00

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	7500
1000	4000
2000	5000
3000	5500
4000	5750
5000	5950
6000	6125
7000	6225
8000	6125
9000	5975

Answer 1

Number of Newspapers per day	Total revenue	Fixed Cost	Variable Cost per Unit (Given)	Total Variable Cost	Total Cost per day	Marginal Revenue	Marginal Cost	Total profit	Price
A	B	C	D	E	F=C+E	G	H	I	J
0	0	5000			5000
1000	4000	5000	0.10	100	5100	4.00	0.10	-1100	4.00
2000	5000	5000	0.10	200	5200	1.00	0.10	-200	2.50
3000	5500	5000	0.12	360	5480	0.50	0.28	20	1.83
4000	5750	5000	0.13	520	5640	0.25	0.16	110	1.44
5000	5950	5000	0.14	700	5900	0.20	0.26	50	1.19
6000	6125	5000	0.15	890	6140	0.18	0.24	-15	1.02
7000	6225	5000	0.16	1090	6400	0.10	0.26	-175	0.89
8000	6125	5000	0.16	1310	6760	-0.10	0.36	-635	0.77
9000	5975	5000	0.17	1550	7160	-0.15	0.40	-1185	0.66
1. The Manager should charge 1.44 per Newspaper and
2. The Manager should sell 4000 Newspapers per day in order to maximise his Total Profit to optimum level in the given scenario