Refer to the Article Summary. Use a graph to illustrate average ...

[Bob-Dole]

Refer to the Article Summary. 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.
 
  What will be an ideal response?

Question 2

If, between 2006 and 2016, the economy's real GDP grew from 20 billion to 40 billion, what was the average annual growth rate in the economy?
 
  A) 3 B) 7 C) 20 D) 100

[sylvia]

Answer to Question 1

Before closing the stores, Macy's would be represented by ATC2, because they expected their sales to be Q2. In that case, their average costs would have been AC1. In fact, their sales were only Q1, which meant their costs were AC3. Based on changing shopping habits, Macy's is closing 35 to 40 stores. After closing these stores, Macy's is represented by ATC1. This would have lowered their average costs to AC2, which is at the minimum of this average total cost curve.

Answer to Question 2

B