The shut-down point in the short run is the:

Question

Quizplus · Accepted Answer

The shut-down point is the point at which the firm covers its variable costs but not its fixed costs. In the short run, the fixed costs cannot be avoided, so the firm only needs to cover its variable costs to stay in business. The minimum point of AVC (average variable cost) is the point at which the firm covers its variable costs, so this is the shut-down point. Therefore, choice letter B is the correct answer.

The Shut-Down Point in the Short Run Is The