(solution) You are a newspaper publisher. You are in the middle of a

(solution) You are a newspaper publisher. You are in the middle of a

You are a newspaper publisher. You are in the middle of a one-year rental contract for your factory that requires you to pay $500,000 per month, and you have contractual labor obligations of $1,250,000 per month that you can?t get out of. You also have a marginal printing cost of $0.25 per paper as well as a marginal delivery cost of $0.10 per paper.

If sales fall by 20 percent from 1,000,000 papers per month to 800,000 papers per month, what happens to the AFC per paper?

Instructions: Round your answers to two decimal places.

AFC per paper (Click to select)risesfallsfrom $ _______ per paper to $________  per paper.
You are a newspaper publisher. You are in the middle of a one-year rental contract for your factory that requires
you to pay $500,000 per month, and you have contractual labor obligations of…