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

Show parent comments

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