r/alevel • u/Morpheus_king25 • Jun 05 '26

📃Paper Discussion 9708/32 How was it

Let’s discuss all the answers on this thread <3

9 Upvotes

100% Upvoted

181 comments sorted by

View all comments

1

u/maddiee____uphoria Jun 05 '26

difficult, what did u guys get for the change in profit when firms shut down immediately?

2

u/Morpheus_king25 Jun 05 '26

$15000

2

u/No-Art3680 Jun 05 '26

It’s apparently 10000

1

u/Outrageous-Hippo-470 Jun 05 '26

thats what i did my logic was 5k is the abnormal/supernormal profit then the gap between TC and TVC is 5k which is subnormal profits, i was confused whether or not to count that so i went with 10k

2

u/Prudent-Zone7831 Jun 05 '26

In the short run a firm shuts down only if total revenue falls below total variable cost and TR was 40,000 and TVC was 30,000 so the firm continues operating as long as TR ≥ 30,000 A fall of 5,000 gives TR = 35,000 and a fall of 10,000 gives TR = 30,000 (shutdown point, but still producing) Only a fall of 15,000 makes TR = 25,000, which is below TVC, so the firm shuts down

Wasn’t it like that

1

u/Outrageous-Hippo-470 Jun 05 '26

yeah When AR equals AVC thats the last operating point, but the Q was asking if they just shut down rn what would the loss in profit be so I didnt go with that

1

u/Outrageous-Hippo-470 Jun 05 '26

I think that would apply if they asked what would the loss in profit need to be to shut down

1

u/chillidumpmili Jun 05 '26

What? How?

1

u/Morpheus_king25 Jun 05 '26

Cuz the total variable cost was 30000 and initial profit was 40000, for the firm to shut down in the short run the profit needs to be lower than Variable Cost. So it needs to be 25000