Principles of Microeconomics / Unit 7 MIC 0617 short lesson, about 20 seconds
Three Zones of the Marginal Cost Curve
Captions available
The idea
Above the break-even point, prices bring profit. Between break-even and shutdown, prices bring a loss the firm accepts while operating. Below the shutdown point, the firm produces nothing.
In practice
Thirty dollars, twenty-two dollars and twelve dollars, for the farm.
Where people slip
The zones are read off one curve, marginal cost, at the two prices where it crosses the two averages.
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