Refer to the information provided in Figure 9.2 below to answer the question(s) that follow. Figure 9.2
-Refer to Figure 9.2. The firm's ________ point is at a price of $6.
A) profit maximizing
B) break even
C) shut down
D) loss maximizing

Question

Refer to the information provided in Figure 9.2 below to answer the question(s) that follow.  Figure 9.2
-Refer to Figure 9.2. The firm's ________ point is at a price of $6.
A) profit maximizing 
B) break even 
C) shut down 
D) loss maximizing

Quizplus · Accepted Answer

The shut down point is where the price equals the minimum average variable cost. If the firm's shut down point is at a price of $6, it means that at this price, the firm covers its variable costs but not its fixed costs, and would cease production if the price falls below this level.

Refer to the Information Provided in Figure 9