(Transcript of audio with descriptions. Transcript includes narrator headings and description headings of the visual content)
(Speaker)
As we saw above, any decrease in price will cause the owner to lose money. Does this also apply if the owner decides to lower price, so she sells at the minimum average total cost output?
(Description)
The following text is briefly written:
What would happen to the restaurant owner's profit if she were to lower the price so that she sells the minimum-cost output?
(Speaker)
The industry is current in long run equilibrium.
(Description)
The diagram for the previous slide is shown.
A new point, Q subscript 1, is labeled on the horizontal axis, so that the axis has points, Q subscript MC, and, Q subscript 1, from left to right.
New points, ATC subscript 1, and, p subscript C, are labeled on the vertical axis, so that the axis has points, p subscript C, ATC subscript 1, and p subscript MC, from left to right, respectively.
There are three new dotted lines drawn from points, Q subscript 1, on the horizontal axis, and from points, P subscript 1, and, ATC subscript 1, on the vertical axis. The first dotted line is parallel to the vertical axis, the second and the third dotted lines are parallel to the horizontal axis.
The first dotted line extending from point, Q subscript 1, intersects with the second dotted line extending from point, p subscript 1, at point with coordinates, Q subscript 1, and, p subscript 1, and intersects with the third dotted line extending from point, ATC subscript 1, at point with coordinates, Q subscript 1, and, ATC subscript 1.
(Speaker)
Any reduction in price will cause the owner to lose money. In the graph, we show the loss she would incur if she sets prices to produce at the lowest average total cost.
(Description)
The area labeled Loss is represented by a rectangular. It has the following verteces.
The first vertex is point, p subscript C, on the horizontal axis.
The second vertex is point, ATC subscript 1, on the horizontal axis.
The third vertex is point with coordinates, Q subscript 1, and, ATC subscript 1.
The fourth vertex is point with coordinates, Q subscript 1, and, p subscript C.
This area is highlighted. It is also labeled as Even producing where ATC is minimized still causes the owner to be worse off.
(Speaker)
She shouldn't change price, given she's in long-run equilibrium.