00:01
So before we get into any calculations, we have to talk about if the firm should operate.
00:05
You should shut down if your profits are worse than your fixed costs.
00:21
That's how i think of it, right? if you shut down, you lose the money that you paid for fixed costs.
00:27
So you should operate as long as the profits you get from operating are going to be at least on net in total better than just shutting down.
00:41
So here we are told a whole bunch of things.
00:44
We're told that quantity is equal to 3 ,000.
00:47
We're told that total cost is equal to 36 ,000.
00:54
And we're told that fixed cost is equal to 20 ,000.
00:59
And the price is equal to 10.
01:01
So a, we shut down, we produce q equals to zero, and we lose 20 ,000...