Explore BrainMass
Share

Explore BrainMass

    Break even

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

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

    Fill in the blanks

    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?

    © BrainMass Inc. brainmass.com October 10, 2019, 12:49 am ad1c9bdddf
    https://brainmass.com/economics/pricing-output-decisions/break-shutdown-price-308898

    Attachments

    Solution Preview

    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 ...

    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.

    $2.19