1. MR Cost Curve Example 5 10 15 20 25 30 5101520253035 0 MC ATC AFC AVC What is your level of production if your price is 25? PRICE QUANTITY

2. MR Cost Curve Example 5 10 15 20 25 30 5101520253035 0 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

3. MR What is TR? 5 10 15 20 25 30 5101520253035 0 MC ATC AFC AVC PRICE QUANTITY

4. MR TR= Grey Area 5 10 15 20 25 30 5101520253035 0 MC ATC AFC AVC Grey Area: TR= Price * Q PRICE QUANTITY

5. MR What is TC? 5 10 15 20 25 30 5101520253035 0 MC ATC AFC AVC PRICE QUANTITY

6. MR TC = Red Area 5 10 15 20 25 30 5101520253035 0 MC ATC AFC AVC Red area: TC = ATC x Q PRICE QUANTITY

7. MR 5 10 15 20 25 30 5101520253035 0 MC ATC AFC AVC What area shows Economic Profits? PRICE QUANTITY

8. MR 5 10 15 20 25 30 5101520253035 0 MC ATC AFC AVC Economic Profits = Green Area Green Area Economic Profits = TR - TC PRICE QUANTITY

9. MR 5 10 15 20 25 30 5101520253035 0 MC ATC AFC AVC What is the Breakeven Price and Quantity? PRICE QUANTITY

10. MR 5 10 15 20 25 30 5101520253035 0 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

11. MR 5 10 15 20 25 30 5101520253035 0 MC ATC AFC AVC What is the Shutdown Price and Quantity? PRICE QUANTITY

12. MR 5 10 15 20 25 30 5101520253035 0 MC ATC AFC AVC Shutdown Price and Quantity = Turquoise Lines Its the price that just covers total variable costs Minimum AVC PRICE QUANTITY

13. MR 5 10 15 20 25 30 5101520253035 0 MC ATC AFC AVC What is the Supply Curve? PRICE QUANTITY

14. MR 5 10 15 20 25 30 5101520253035 0 MC ATC AFC AVC Supply Curve = Lime Green Line MC curve above the AVC PRICE QUANTITY