Firm cost curves: produce where marginal cost equals the price Profit 0 $7 $9 $25 MC ATC AVC P = $25 = MR min AVC $7 · shut-down floor min ATC $9 · loss floor $11.40 7 Units of output per day Price and cost ($) At 7 units: MC = $25, ATC = $11.39, AVC = $10.18. Price $25, above the $9 loss floor. Produce where MC meets the price: profit = ($25 − $11.39) × 7 = $95.29.