MR Cost Curve Example MC ATC AFC AVC What is your level of production if your price is 25? PRICE QUANTITY

MR Cost Curve Example MC ATC AFC AVC What is your level of production if your price is 25? REMEMBER: Profit Max occurs where MC=MR=P PRICE QUANTITY

MR What is TR? MC ATC AFC AVC PRICE QUANTITY

MR TR= Grey Area MC ATC AFC AVC Grey Area: TR= Price * Q PRICE QUANTITY

MR What is TC? MC ATC AFC AVC PRICE QUANTITY

MR TC = Red Area MC ATC AFC AVC Red area: TC = ATC x Q PRICE QUANTITY

MR MC ATC AFC AVC What area shows Economic Profits? PRICE QUANTITY

MR MC ATC AFC AVC Economic Profits = Green Area Green Area Economic Profits = TR - TC PRICE QUANTITY

MR MC ATC AFC AVC What is the Breakeven Price and Quantity? PRICE QUANTITY

MR MC ATC AFC AVC Breakeven Price and Quantity = Pink Lines Its the price that just covers total costs TR = TC implies economic profits are zero Minimum ATC PRICE QUANTITY

MR MC ATC AFC AVC What is the Shutdown Price and Quantity? PRICE QUANTITY

MR MC ATC AFC AVC Shutdown Price and Quantity = Turquoise Lines Its the price that just covers total variable costs Minimum AVC PRICE QUANTITY

MR MC ATC AFC AVC What is the Supply Curve? PRICE QUANTITY

MR MC ATC AFC AVC Supply Curve = Lime Green Line MC curve above the AVC PRICE QUANTITY