Final answer:
To calculate profits, compare total revenue with total cost and examine profit/loss patterns using the average cost curve. The shutdown point helps determine if production should continue in the short run, while analyzing cost patterns informs potential profitability.
Step-by-step explanation:
The operations of Shilow Company, as described in the question, pertain to several business-related functions. To calculate profits, one must compare total revenue with total cost. To analyze business performance further, you can identify profits and losses using the average cost curve, which demonstrates how costs per unit of output change with different levels of production. Moreover, understanding the shutdown point is crucial because it indicates the price below which the company should cease production in the short run to avoid losses. Finally, the company should determine the price point above the shutdown point to ensure they cover all variable and some fixed costs to continue producing in the short runProfitability and decision-making are also informed by evaluating patterns of costs, such as fixed cost, variable cost, marginal cost, and average cost, which are all key in determining potential profit or loss.