# Economics

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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
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 -

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.

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