# 1. Monthly Total Revenue **Given:** From the article ["How To Start A Magazine (And Make A Profit)"](https://marco.org/2012/10/09/how-to-start-a-magazine): - The Magazine had about **35,000 subscribers** at its peak. - Each subscriber paid **$1.99 per month**. **Calculation:** \[ \text{Total Revenue} = \text{Number of Subscribers} \times \text{Price per Subscriber} \] \[ = 35,000 \times \$1.99 = \$69,650 \text{ per month} \] --- # 2. Monthly Accounting Profit **Given Costs from the Article:** - Writers: \$800 per article, 4 articles per issue, 2 issues per month \(4 \times \$800 \times 2 = \$6,400\) - Editor: \$2,000 per month - Copyediting: \$500 per month - Illustration: \$400 per month - Hosting, Mailing List, Support: \$500 per month - Apple’s 30% App Store cut: 30% of revenue **Calculation:** ### a. Apple’s Cut \[ \text{Apple's Cut} = 0.3 \times \$69,650 = \$20,895 \] ### b. Total Monthly Costs \[ \text{Total Costs} = \text{Writers} + \text{Editor} + \text{Copyediting} + \text{Illustration} + \text{Hosting} + \text{Apple's Cut} \] \[ = \$6,400 + \$2,000 + \$500 + \$400 + \$500 + \$20,895 = \$30,695 \] ### c. Accounting Profit \[ \text{Accounting Profit} = \text{Total Revenue} - \text{Total Costs} \] \[ = \$69,650 - \$30,695 = \$38,955 \text{ per month} \] --- # 3. Annual Profit \[ \text{Annual Profit} = \$38,955 \times 12 = \$467,460 \text{ per year} \] --- # 4. Costs Not Included (Opportunity Cost) **Not included in accounting profit:** - **Marco Arment’s time and effort** (could be used elsewhere) - **Capital invested** (could earn returns elsewhere) **These are examples of opportunity costs.** --- # 5. Economic Profit and Magazine’s Closure - **Economic Profit** = Accounting Profit - Opportunity Cost - Since Marco shut down The Magazine after 28 months—even with strong accounting profit—it suggests that **economic profit was zero or negative**. - The opportunity cost of Marco’s time and other resources was likely high enough that the magazine's profits did not justify continuing. --- ## **Summary Table** | Calculation | Value | |------------------|--------------| | Monthly Revenue | \$69,650 | | Monthly Profit | \$38,955 | | Annual Profit | \$467,460 | **Key insight:** The Magazine earned accounting profit, but not enough economic profit to justify its continuation for Marco Arment.

# Corrected Step-by-Step Solution for The Magazine ## 1. Monthly Total Revenue - **Subscribers:** approximately **25,000** (per Marco’s own reports) - **Price per subscriber:** **$1.99** \[ \text{Gross revenue} = 25,000 \times \$1.99 = \$49,750 \] ## 2. Monthly Accounting Profit - **Apple’s cut:** roughly **30%** \[ \text{Apple's cut} = 0.30 \times \$49,750 = \$14,925 \] - **Net revenue to publisher:** \[ \$49,750 - \$14,925 = \$34,825 \] - **Explicit monthly costs:** Marco estimates **a bit over \$20,000** (covers writers, editors, hosting, etc.). \[ \text{Accounting profit} = \$34,825 - \$20,000 \approx \boxed{\$14,825} \] ## 3. Annual Profit \[ \$14,825 \times 12 \approx \boxed{\$177,900} \] ## 4. Costs Not Included (Opportunity Cost) - Marco’s time and effort (could be used elsewhere) - Capital investments or alternative uses of resources These are opportunity costs not reflected in the accounting profit. ## 5. Implication of Marco Arment stopping after 28 months Despite positive accounting profit, the venture likely had **zero or negative economic profit** after considering opportunity costs. This explains why he discontinued the magazine: the true profit (economic profit) did not justify his continued effort or resources. --- ## Summary | Metric | Value | |---------|---------| | Monthly Total Revenue | **\$49,750** | | Monthly Accounting Profit | **\$14,825** | | Annual Accounting Profit | **\$177,900** | **Note:** Using 25,000 subscribers and Marco’s estimated \$20,000/month costs yields these realistic figures consistent with the article.