(Transcript of audio with descriptions. Transcript includes narrator headings and description headings of the visual content)
(Description)
The following text is written:
Suppose that the price at which Kate can sell catered meals is 18 dollars per meal. How many meals will Kate produce in the short run? Should she shut down or produce in the short run? Long run?
The table from the previous slide is shown.
(Speaker)
In the last part, you found that when the price exceed the break-even price Kate will earn a profit. Now you are asked what happens when the price falls to 18 dollars.
When price falls to 19 dollars, Kate learns that she will be able to cover her shut-down price of 15 dollars but does not give her enough money to reach her break-even price of 19 dollars 33 cents. At a price of 18 dollars, Kate will produce 30 meals in the short run.
(Description)
A cell at the intersection of the fourth row and the column MC of meal with the value, 18.00 dollars, is highlighted.
(Speaker)
She will shut down in the long run as she is losing 1 dollar 33 cents per meal.
(Description)
The following text is written above the table:
Profit maximizing output occurs where P equals MC
Shut down if P is less than minimum of AVC
Break even if P equals minimum of ATC
The following text is written below the table:
At a price of 18 dollars Kate will produce 30 meals. The price is greater than the minimum of AVC so Kate should operate in the short run, but the price is less than the minimum of ATC so Kate should shut down in the long run. Kate is losing 1 dollar 33 cents per meal (19 dollars 33 cents minus 18 dollars zero cents).