Doctor J.is considering purchasing a new blood analysis machine for $60,000.He estimates that he could charge $80.00 for an office visit to have a patient's blood analyzed,while the variable cost of a blood analysis would be $30.00. What would be his profit if he were to perform 5,000 blood analyses?

Question

Quizplus · Accepted Answer

First, we need to calculate Doctor J's total revenue from performing 5,000 blood analyses:

Revenue per blood analysis = $80.00
Number of blood analyses = 5,000
Total revenue = $80.00 x 5,000 = $400,000

Next, we need to calculate the variable costs of performing 5,000 blood analyses:

Variable cost per blood analysis = $30.00
Number of blood analyses = 5,000
Total variable costs = $30.00 x 5,000 = $150,000

Now, we can calculate Doctor J's total profit:

Total revenue = $400,000
Total variable costs = $150,000
Total fixed costs (cost of new machine) = $60,000
Total profit = Total revenue - Total variable costs - Total fixed costs
Total profit = $400,000 - $150,000 - $60,000
Total profit = $190,000

Therefore, Doctor J's profit from performing 5,000 blood analyses would be $190,000. Option C is the correct answer.

Doctor JIs Considering Purchasing a New Blood Analysis Machine for $60,000