To make their services free to users, most social networks rely on advertisements to cover their costs. Suppose that a new social network has $12000.00 in total operating costs regardless of the number of users. If the average user clicks on an ad 0.50 times, and each click earns the social network $1 in ad revenue, how many users will the network need to sign up in order to break even? Give your answer to two decimals.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter16: Government Regulation
Section: Chapter Questions
Problem 2.3CE
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To make their services free to users, most social networks rely on advertisements to cover their costs. Suppose that a new social
network has $12000.00 in total operating costs regardless of the number of users. If the average user clicks on an ad 0.50 times, and
each click earns the social network $1 in ad revenue, how many users will the network need to sign up in order to break even? Give your
answer to two decimals.
Transcribed Image Text:To make their services free to users, most social networks rely on advertisements to cover their costs. Suppose that a new social network has $12000.00 in total operating costs regardless of the number of users. If the average user clicks on an ad 0.50 times, and each click earns the social network $1 in ad revenue, how many users will the network need to sign up in order to break even? Give your answer to two decimals.
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