b) Shut-down points

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4 Terms

1
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  • the short-run shut down point on a graph




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2
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  • in the short-run, a firm should shut down if…


  • the selling price < AVC

  • because the firm cannot cover the AFC

  • and is making a loss


3
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  • in the long run, a firm should shut down if…


  • the selling price < ATC

  • because the firm cannot cover the ATC

  • and is making a loss


4
New cards

  • the long-run shut down point on a graph




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