New Source Performance Standards Game

Earnings

Your earnings are determined in the following manner:

earnings = (price offered × quantity sold) - total cost of units sold

Note: the buyers could buy less units than the number of units offered when the price is too high or when there are not enough buyers in the market. If this happens, you will only incur the cost of the units that you actually sell, not the costs of the units that you offered.

Example: suppose you have four "units" to sell and that your production costs are

• Cost of producing first unit: \$2.70
• Cost of producing second unit: \$2.90
• Cost of producing third unit: \$3.10
• Cost of producing fourth unit: \$3.30

If you select a price of \$5.75 and you sell 4 "units", then your earnings are:

(\$5.75 × 4) -\$3.30 - \$3.10 - \$2.90 - \$2.70 = \$11.00.

If you select a price of \$2.85 and offer to sell 4 units but only sell 3 units, then your
earnings are:

\$2.85 *3 - \$2.70 - \$2.90 - \$3.1- = -\$0.55, i.e. a loss of 75 cents.