Posted by Matthew on .
Hi there,
I am having trouble with this problem.Can you give me some guidance.
In planning the publication of a new engineering economics textbook, the publisher has identified the following fixed and variable costs.
Fixed Costs
Overhead $10,000
Editing and Typesetting $100,000
Author's Fee $10,000
Variable Costs
Printing/binding $25/copy on first
5000 copies
$20/copy on copies
above 5000
Author's royalty $2/copy
Warehousing/distribution$1/Copy
If the publisher prints 4000 copies, determine the average and marginal cost per copy. What are these costs if the publisher prints 7500 copies.
Thank you.

Economics 
economyst,
In your problem:
total fixed costs (TFC) are 120,000
total variable costs (TVC) are 4000*(25+2+1) = 112,000
Total costs are 120,000+112,000=232,000
Average costs are 232,000/4000 = 58.
Marginal costs are the cost of producing one more book = 25+2+1 = 28.
Ok, now repeat for the 7500 production case. Take it from here.