Suppose a publisher faces the following costs of producing 10,000 newspapers each month: $5,500 cost of labor; $2,200 monthly mortgage payment; $250 cost of electricity to run the printing presses; $800 for ink and paper; and $200 in city property taxes (based on the value of the building and land). Its total variable costs are:

Question

Quizplus · Accepted Answer

Variable costs include costs that change with the level of output, such as labor, electricity, and ink and paper. Therefore, the total variable costs are $5,500 (labor) + $250 (electricity) + $800 (ink and paper) = $6,550.

Suppose a Publisher Faces the Following Costs of Producing 10,000