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?

Question

Quizplus · Accepted Answer

The extra profit is calculated by the increase in price per fish ($0.50) multiplied by the number of fish (20,000), which equals $10,000. This amount is enough to cover all of the variable costs of your next two trips, assuming each trip has the same variable cost of $5,000.

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