The shutdown point occurs where price is below the minimum of
A)MR.
B)AVC.
C)AFC.
D)ATC.

Question

Quizplus · Accepted Answer

The shutdown point is the point at which a firm experiences losses so great that it is better to temporarily cease operations rather than continue production. This point occurs when the price is below the minimum average variable cost (AVC), as the firm would not even be able to cover its variable costs at this price level. Therefore, the best choice is B - where price is below AVC.

The Shutdown Point Occurs Where Price Is Below the Minimum