The shutdown point occurs at the point of minimum

Name: The shutdown point occurs at the point of minimum
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The shutdown point occurs at the point where price equals the minimum point of the average variable cost curve. At this point, the firm is covering its variable costs but is not covering its fixed costs, and so it is better to shut down in the short run rather than produce at a loss. Therefore, the answer is choice B, average variable cost.

The Shutdown Point Occurs at the Point of Minimum