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# Answer to Question #59385 in Microeconomics for georgi

Question #59385
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$100. Her variable costs are $1,500 for the first thousand posters,$1,200 for the second thousand, and then $800 for each additional thousand posters. 1 Expert's answer 2016-04-23T06:49:06-0400 P =$1, FC = $100, VC =$1,500 for the first thousand posters, $1,200 for the second thousand, and then$800 for each additional thousand posters.
Shutdown point is determined by the AVC, so the firm will shut down, if P < AVC. If the market price fall to $0.7 per poster, then AVC = 1500/1000 =$1.5 per poster for the first thousand posters, AVC = 1200/1000 = $1.2 per poster for the second thousand posters and AVC = 800/1000 =$0.8 per poster for the each additional thousand posters, so at any level of production P < AVC and the firm should shut down.

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