At a price of $3 each, SHAPE magazine sells 1.25 million copies of its magazine targeted to young women seeking a healthier lifestyle. If the price per issue is increased to $3.25 each, only 1 million copies will be sold. Fixed costs are $1 million and unit variable costs are $0.50 per magazine. For the information provided here, what is SHAPE magazine's total revenue obtained at the lower price?
A)$1,625,000
B)$3,000,000
C)$3,750,000
D)$2,125,000

Question

Quizplus · Accepted Answer

To calculate total revenue, we need to use the formula: 
Total revenue = (Price per unit x Quantity sold) 
At the lower price of $3, SHAPE sells 1.25 million copies of the magazine. 
Total revenue = (3 x 1,250,000) = $3,750,000 
Therefore, the answer is C, with a total revenue of $3,750,000.

At a Price of $3 Each, SHAPE Magazine Sells 1