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what is shut down point of a firm?

yacub kharia 20th Jan, 2020

Answer (1)

Shubhangi sinha 20th Jan, 2020

Hello sir,

The shut down point of a firm means a company will shut down in the short run if its average variable costs (AVC) exceed price at all output rates. The output at which price equals the AVC is called the shutdown point.

It is a level of operations at which a company experiences no benefit for continuing operations.

Good luck,

Hope it helps :)

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