Use the table below to answer the following questions.
Table 11.2.5

-Refer to Table 11.2.5.Archibald's Tattoos is a perfectly competitive firm.The firm's total costs are shown in the table.The price at Archibald's shut-down point is

Question

Use the table below to answer the following questions.
Table 11.2.5
 
-Refer to Table 11.2.5.Archibald's Tattoos is a perfectly competitive firm.The firm's total costs are shown in the table.The price at Archibald's shut-down point is

Quizplus · Accepted Answer

The shut-down point is where the price falls below the minimum of the average variable cost, which is $12.50 in this case. Therefore, if the price falls below $12.50, Archibald's Tattoos should shut down in the short run. If the price is above $12.50, Archibald's Tattoos should produce the quantity where marginal cost equals price (which is 5 in this case) in order to maximize profits.

Use the Table Below to Answer the Following Questions