Excel step by step TheEl Dorado Staris the only newspaper in El Dorado, New Mexico. Certainly, theStarcompete withThe Wall Street Journal,USA Today, and theNew York Timesfor national news reporting, but theStaroffers readers stories of local interest, such as local news, weather, high-school sporting events, and so on. The El Dorado Star faces the demand and cost schedules shown in the spreadsheet that follows:

(1)

Number of newspapers per day (Q)

(2)

Price (P)

(3)

Total cost per day (TC)

00$2,0001,000$1.502,1002,0001.252,2003,0001.002,3604,0000.802,5205,0000.702,7006,0000.602,8907,0000.553,0908,0000.453,3109,0000.403,550

A. Create spreadsheet using Microsoft Excel (or any other spreadsheet software) that matches the one above by entering the output, price, and cost data given.

b. Use the appropriate formulas to create three new columns (4, 5, and 6) in your spreadsheet for total revenue (TR), marginal revenue (MR), and marginal cost (MC), respectively. [Computation check: AT Q = 3,000, MR = $0.50 and MC = $0.16]. What price should the manager of theEl Dorado Starcharge? How many papers should be sold daily to maximize profit?

c. At the price and output level you answered in partb, is theEl Dorado Starmaking the greatest possible amount of total revenue? Is this what you expected? Explain why or why not.

d. Use the appropriate formulas to create two new columns (6 and 7) for total profit and profit margin. What is the maximum profit the El Dorado Star can earn? What is the maximum possible profit margin? Are profit and profit margin maximized at the same point on demand?

e. What is the total fixed cost of theEl Dorado Star? Create new spreadsheet in which total fixed cost increases to $5,000. what price should the manager charge? How many papers should be sold in the short run? What should the owners of theStardo in the long run