The shut-down point of a perfectly competitive firm is at the minimum point on its short-run average variable cost curve.

Name: The shut-down point of a perfectly competitive firm is at the minimum point on its short-run average variable cost curve.
Brand: Quizplus
Rating: 4.9 (44 reviews)

Question

Quizplus · Accepted Answer

The shut-down point occurs where the price is equal to the minimum point of the short-run average variable cost curve, as this is the point below which the firm would not be able to cover its variable costs and would cease production in the short run.

The Shut-Down Point of a Perfectly Competitive Firm Is at the Minimum