How much revenue per user would it have to collect

Reference no: EM133553782

Suppose that Instagram has a fixed cost of $1,200,000,000 and a variable cost that is constant at $0.04 per user. (Hint: In what follows, remember that a million is a 1 followed by six zeros and that a billion is a 1 followed by nine zeros. Also recall that ATC = AFC AVC and that MC is the marginal change in ATC when you add an additional user.) If Instagram has 1 billion users, how much revenue per user would it have to collect in order to break even?

Reference no: EM133553782

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