Article Summary

Due to changing shopping habits and increased online sales, Macy's announced it would be closing 35 to 40 underperforming stores in early 2016. The stores represent about 5 percent of its total locations, and the company expects to lose about $300 million in sales, or 1 percent of total sales, from the closures. Over the past five years, Macy's has closed 52 stores and opened 12 new locations, leaving the company 770 stores in 45 states. Source: Ed Brackett and Alexander Coolidge, "Macy's to close up to 40 stores," USA Today, September 9, 2015.

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Refer to the Article Summary above. Use a graph to illustrate average total cost curves for Macy's before and after closing the 35 to 40 stores. Assume that after closing the stores, Macy's will be producing at minimum average total cost.