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)$3,750,000
B)$3,000,000
C)$2,125,000
D)$1,625,000

Question

Quizplus · Accepted Answer

Total revenue obtained at the lower price can be calculated by using the formula:

Total Revenue = Price × Quantity

Price = $3

Quantity = 1.25 million = 1,250,000

Total Revenue = $3 × 1,250,000 = $3,750,000

Therefore, the answer is A) $3,750,000.

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