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Break even

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Output Fixed Cost AFC VC AVC TC ATC MC
1 $50 $30
2 $50 $50
3 $50 $80
4 $50 $120
5 $50 $170

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What is the minimum price needed by a firm to break even?
What is the shutdown price?
At a price of $40, what output level would the firm produce? What would its profits be?

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Solution Summary

The solution goes into a great amount of detail regarding the break even and shutdown price. Step-by-step explanation is provided for each part of the question which makes it very easy to follow along for anyone with just a basic understanding of the concepts. Overall, an excellent response to the question being asked.

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Please see the excel file attached.

Output Fixed Cost AFC VC AVC TC ATC MC
1 $50 $50 $30 $30 $80 $80 $30
2 $50 $25 $50 $25 $100 $50 $20
3 $50 $17 $80 $27 $130 ...

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