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Italian News Website

The document analyzes the total costs and profits for a business with varying numbers of journalists producing articles each month. It shows that as the number of journalists and articles increases, total costs increase due to higher variable costs. Marginal cost initially decreases but then increases, while marginal revenue remains constant. The profit maximizing level of output is reached when marginal cost equals marginal revenue, which occurs when the business has 4 journalists producing 54 articles per month, resulting in zero economic profit.

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Sai Kumar
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94 views3 pages

Italian News Website

The document analyzes the total costs and profits for a business with varying numbers of journalists producing articles each month. It shows that as the number of journalists and articles increases, total costs increase due to higher variable costs. Marginal cost initially decreases but then increases, while marginal revenue remains constant. The profit maximizing level of output is reached when marginal cost equals marginal revenue, which occurs when the business has 4 journalists producing 54 articles per month, resulting in zero economic profit.

Uploaded by

Sai Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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No.

of Articles per Fixed Cost per Variable Cost per Total Cost per Average Total
Journalists Month Month Month Month Cost
1 15 8000 3000 11000
2 29 8000 6000 14000
3 42 8000 9000 17000
4 54 8000 12000 20000
5 65 8000 15000 23000
6 75 8000 18000 26000
7 84 8000 21000 29000
8 92 8000 24000 32000
9 99 8000 27000 35000
10 105 8000 30000 38000

92

no of articles the
business MC=MR
producing

total profit
Marginal
Marginal Cost Total Revenue Total Profit/Loss
Revenue
5625 -5375
214.285714285714 10875 375 -3125
230.769230769231 15750 375 -1250
250 20250 375 250
272.727272727273 24375 375 1375
300 28125 375 2125
333.333333333333 31500 375 2500
375 34500 375 2500
428.571428571429 37125 375 2125
500 39375 375 1375

2500

When MC meets/is
equal to MR then it
is called Profit
Maximising Level

Conceptual
explanation on
how you arrived at
the profit
maximising level
of output
No. of Articles Variable Total Total
Marginal Total Marginal
Journalis per Cost per Cost per Profit/Los
Cost Revenue Revenue
ts Month Month Month s
1 15 3000 3000 3750 750
2 29 6000 6000 214.2857143 7250 250 1250 -35.71429
3 42 9000 9000 230.7692308 10500 250 1500 -19.23077
4 54 12000 12000 250 13500 250 1500 0
5 65 15000 15000 272.7272727 16250 250 1250 22.727273
6 75 18000 18000 300 18750 250 750 50
7 84 21000 21000 333.3333333 21000 250 0 83.333333
8 92 24000 24000 375 23000 250 -1000 125
9 99 27000 27000 428.5714286 24750 250 -2250 178.57143
10 105 30000 30000 500 26250 250 -3750 250

PROFIT 1500

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