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Q. A small college has space for a maximum of 1,000 students. The college can identify 500 of its students who are willing to pay $20,000 every year also 500 students who are willing to pay $10,000 every year. The college has annual fixed costs of $10 million, also the variable cost for every additional student is $5,000. To continue oeveryating, the college must receive payments equal to its total costs (that is, total fixed costs + total variable costs).
Illustrate what are the total costs in millions of dollars if the school serves 1,000 students?
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