Answered: The shut-down point for a firm in a…

Business

Economics

The shut-down point for a firm in a perfectly competitive industry is: P = MR P = ATC P = MC P = AVC

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter9: Market Structure And Long-run Equilibrium

Section: Chapter Questions

Problem 5MC

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Question

MCQ:

The shut-down point for a firm in a perfectly competitive industry is:

P = MR
P = ATC
P = MC
P = AVC

Definition Definition Measure of the cost of production per unit of output, including only variable costs such as wages, materials, and utilities. AVC is calculated by dividing total variable cost by the number of units produced. Understanding average variable cost is important for businesses to make decisions on pricing, production levels, and profitability.

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