Karen runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1 per poster. She has fixed costs of $250. Her variable costs are $1,800 for the first thousand posters, $1,500 for the second thousand, and then $900 for each additional thousand posters.
Instructions: Round your answers to 3 decimal places.
a. What is her AFC per poster (not per thousand!) if she prints 1,000 posters? $
What if she prints 2,000 posters? $
What if she prints 10,000 posters? $
b. What is her ATC per poster if she prints 1,000? $
What if she prints 2,000? $
What if she prints 10,000? $
c. If the market price fell to 85 cents per poster, would there be any output level at which Karen would not shut down production immediately? .
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