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#cfa #cfa-level-1 #economics #has-images #reading-15-demand-and-supply-analysis-the-firm #section-3-analysis-of-revenue-costs-and-profit
A firm’s shutdown point occurs when average revenue is less than average variable cost (any output below Qshutdown), which corresponds to point A.
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of its fixed costs. In the long run, however, the firm is not able to survive if fixed costs are not completely covered. Any operating point above point B (the minimum point on ATC), such as point D, generates an economic profit. <span>A firm’s shutdown point occurs when average revenue is less than average variable cost (any output below Q shutdown ), which corresponds to point A in Exhibit 17. Shutdown is defined as a situation in which the firm stops production but still confronts the payment of fixed costs in the short run as a business entity. In the short run, a business
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of its fixed costs. In the long run, however, the firm is not able to survive if fixed costs are not completely covered. Any operating point above point B (the minimum point on ATC), such as point D, generates an economic profit. <span>A firm’s shutdown point occurs when average revenue is less than average variable cost (any output below Q shutdown ), which corresponds to point A in Exhibit 17. Shutdown is defined as a situation in which the firm stops production but still confronts the payment of fixed costs in the short run as a business entity. In the short run, a business
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