Suppose that you are a manager at a perfectly competitive producer of plywood similar to Nashville Plywood, a plywood producer located in Nashville, Tennessee. The following figure shows your marginal cost curve (MC), average total cost curve (ATC), and average variable cost curve (AVC).

a. At what price or prices do you make an economic profit?

b. At what price or prices do you make a competitive return?

c. At what price or prices do you incur an economic loss?

d. Below what price do you shut down the company?

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Price and cost (dollars per thousand square feet of plywood) $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 MC ATC AVC 0 10 20 30 40 50 60 Quantity (thousands of square feet of plywood per day)