The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.

-Refer to the above information to answer this question.What is the shut-down price?

Question

The following table shows a profit-maximizing producer's marginal costs.The firm is operating in a perfectly competitive market and has fixed costs of $500.
 
-Refer to the above information to answer this question.What is the shut-down price?

Quizplus · Accepted Answer

The shut-down price is the price at which a firm will just cover its variable costs. In this case, the variable costs are $150, so the shut-down price is $150.

The Following Table Shows a Profit-Maximizing Producer's Marginal Costs