Bubba is a shrimp fisherman who catches 4,000 pounds of shrimp per year. He can sell the shrimp for $5 per pound. His average total cost of catching shrimp is $3 per pound. Bubba's annual total revenue is
A)$8,000.
B)$12,000.
C)$20,000.
D)$32,000.

Question

Quizplus · Accepted Answer

Bubba's annual total revenue can be calculated by multiplying the amount of shrimp he catches by the price he can sell it for: 4,000 lbs x $5/lb = $20,000. This is greater than his total cost of catching the shrimp, which is 4,000 lbs x $3/lb = $12,000. Therefore, Bubba's annual profit is $8,000 ($20,000 - $12,000) and his best choice is to continue fishing and selling his catch.

Bubba Is a Shrimp Fisherman Who Catches 4,000 Pounds of Shrimp