Write Equations Of Average Total Cost Variable Cost Marginal Cost, Economics
Write equations for total cost, average total cost, variable cost, and marginal cost.
The Central Publishing Company is about to publish its first textbook in managerial economics. It is now in the process of estimating costs. It expects to produce 10,000 copies during its first year. The following costs have been estimated to correspond to the expected copies.
A paper stock $8,000
B typesetting $15,000
C Printing $50,000
D Art (including graphs) $9,000
E Editing $20,000
F Reviews $3,000
G Promotion $12,000
H Binding $22,000
I Shipping $10,000
In addition to the preceding costs, it expects to pay the authors a 13 percent royalty and its salespeople a 3 percent commission. These percentages will be based on the publisher’s price of $48 per book.
Some of the preceding costs are fixed and others are variable. The average variable costs are expected to be constant. Although 10,000 copies is the projected volume, the book sell anywhere between 0 and 20,000 copies.