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

Multiple Choice

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) c and d
B) Extra profit is zero.
C) Extra profit is enough to cover half of the fixed cost of your next trip.
D) Extra profit is enough to cover all of the variable costs of your next two trips.
E) Extra profit is $45,000.