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Cost Analysis of the Daily Guardian

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Submitted By doitfortheladies
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To analyze a firm’s costs, we have to take into account what type of firm it is, what sources of revenue are present and what choices have to be made in order to maximize profit. That is what we will be doing in analyzing the costs that The Daily Guardian incurs.
The Daily Guardian is a daily newspaper based primarily in Iloilo City at the same time circulating in Manila, Capiz, Aklan and Bacolod. It’s a firm that has 2 sources of income. One is through the distribution of the paper itself and the other is through the publishing of ads and press releases. Both have a very particular relationship that a balance must be held in terms of the efforts of the firm. It’s true that the ads portion of the revenue greatly outmatches that of the subscriber distribution but the number of subscribers determine the number of people who want their business to be advertised in the paper. If efforts were shifted more to getting more advertisers rather than keeping and gaining more subscribers, there would be an opportunity cost incurred. Instead of gaining more subscribers, the firm would presumably gain more advertisers. Now the problem with that is, although more revenue can be generated with advertisements, advertisers would prefer to partner with papers that have many subscribers. It makes sense. They want word of their promos or events to reach the most number of people possible. But a firm doesn’t really just want to increase its gross profit but its net profit. Now how do we know which revenue source would generate the greater net profit? That’s when we take a look at the different

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