Suppose that you have returned from your fishing expedition with 20,000 fish. The market price is $3 per fish. Your average fixed cost was $1 and your total variable cost was $5,000. If the price jumps to $3.50 before you sell your first fish, how much extra profit, if any, do you earn?
A) $10,000.
B) $25,000.
C) $30,000.
D) $45,000.
E) $70,000.

Question

Quizplus · Accepted Answer

The extra profit is calculated by the increase in price per fish multiplied by the number of fish. The price increase is $0.50 per fish, so the extra profit is 20,000 fish * $0.50 = $10,000.

Suppose That You Have Returned from Your Fishing Expedition with 20,000