shut down point in microeconomics
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Gaurav Seth 6 years, 5 months ago
Shutdown point: Shutdown point is a point where a firm is indifferent between whether to produce or shutdown. In other words, it is a situation when a firm is able to cover its variable costs only.
The condition of shutdown point is:
Price = Minimum of SAVC (Short run average variable cost)
Multiply by output
Price x output = SAVC x output
TR = TVC
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