A Newspaper Publisher Finds That the Cost of Printing and Distributing

question 156

Short Answer

A newspaper publisher finds that the cost of printing and distributing each copy of its morning paper is $0.22.The revenue from subscribers is $0.20 per copy.The advertising revenue is 12% of the revenue received from subscribers for all copies sold beyond 15,000.Find the smallest number of copies which must be sold to break even.

---

Definitions:

Economies of Scale

The economic benefits companies achieve through expanding their scale of activity, as the cost for every unit of output falls with the growth in scale.

Income

The financial earnings received by an individual or entity, typically measured over a certain period of time.

Utility-Maximizing

A principle in economics wherein individuals or entities make choices that result in the highest level of satisfaction.

R&D Expenditures

Money spent on research and development activities to innovate and improve products or processes.