Have you ever driven by a poorly maintained business facility and wondered why the owner either fix up the property or go out of business? Consider the story of the Still There Motel on Old Highway North, Anytown, USA. a. Which of the following cases might apply to this motel? i. P > ATC making positive profit ii. P = ATC making zero profit (Break-even point) iii. P > AVC and P < ATC covering AVC and some of AFC iv. P = AVC cover only AVC and none of AFC v. P < AVC (shut-down point) b. Explain why?

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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Have you ever driven by a poorly maintained business facility and wondered why the owner either fix
up the property or go out of business? Consider the story of the Still There Motel on Old Highway
North, Anytown, USA.
a. Which of the following cases might apply to this motel?
i. P > ATC making positive profit
ii. P = ATC making zero profit (Break-even point)
iii. P > AVC and P < ATC covering AVC and some of AFC
iv. P = AVC cover only AVC and none of AFC
v. P < AVC (shut-down point)
b. Explain why?

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