Suppose that the industry demand curve is given by the following quantity demanded = 100 – 0.5 output. In equilibrium, the market price is equal to 6 pesos per unit. q TR MR TFC TVC TC AC AVC AFC MC Profits 0     10               1                 5   2                 3   3                 2   4                 1   5                 2   6                 3   7                 4   8                 5   9                 6   10                 7   11                 8     Identify the price at which the firm breaks -even. Explain. Identify the price at which the frim shuts-down. Explain.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Suppose that the industry demand curve is given by the following quantity demanded = 100 – 0.5 output. In equilibrium, the market price is equal to 6 pesos per unit.

q

TR

MR

TFC

TVC

TC

AC

AVC

AFC

MC

Profits

0

 

 

10

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

5

 

2

 

 

 

 

 

 

 

 

3

 

3

 

 

 

 

 

 

 

 

2

 

4

 

 

 

 

 

 

 

 

1

 

5

 

 

 

 

 

 

 

 

2

 

6

 

 

 

 

 

 

 

 

3

 

7

 

 

 

 

 

 

 

 

4

 

8

 

 

 

 

 

 

 

 

5

 

9

 

 

 

 

 

 

 

 

6

 

10

 

 

 

 

 

 

 

 

7

 

11

 

 

 

 

 

 

 

 

8

 

 

  1. Identify the price at which the firm breaks -even. Explain.
  2. Identify the price at which the frim shuts-down. Explain.
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