If a fishing boat owner brings 10,000 fish to market and the market price is $7 per fish, she will have $70,000 in total revenue. If the average variable cost of 10,000 fish is $4 and the fixed cost of the boat is $20,000, what is her profit?
Question 13 options:
A) $1.
B) $3.
C) $3,000.
D) $10,000.
The total cost is the sum of the fixed cost and the variable cost per unit multiplied by the number of units:
Total cost = $20,000 + ($4 * 10,000) = $20,000 + $40,000 = $60,000
Profit is calculated by subtracting the total cost from the total revenue:
Profit = $70,000 - $60,000 = $10,000
Therefore, her profit is $10,000.
The correct answer is D) $10,000.