Karen runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1.00 per poster. She has fixed costs of $500.00. 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.
What is her AFC per poster if she prints 1,000 posters?
What is her AFC per poster if she prints 2,000 posters?
What is her AFC per poster if she prints 10,000 posters?
What is her ATC per poster if she prints 1,000?
What is her ATC per poster if she prints 2,000?
What is her ATC per poster if she prints 10,000?
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? (Yes or No)