If sales fall by 20 % from 1,000,000 papers per month to 800,000 papers per month, the AFC per paper will <u>rise </u>from <u>$1.5</u> per paper to <u>$1.875</u> per paper.
Since the marginal printing cost is $0.35 per paper and the marginal delivary cost is $0.10 per paper.It will not be affected with a decrease in the sales of paper per month
If the sales decrease from 1,000,000 to 800,000 then for break-even point, the minimum price charged will increase from $1.95 per paper to $2.325 per paper
<h3>How to calculate the value?</h3>
Total fixed cost = 500,000+ 1,000,000
=$ 1,500,000 per month
If the sales of paper falls from 1,000,000 per month to 800,000 paper per month.
AFC= total cost / quantity of paper
if salesis 1000,000
AFC=1,500,000/1,000,000
=$1.5 per paper
If sales is 800,000
AFC=1,500,000/800,000
=$1.875 per paper
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