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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
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.
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um point on ATC), such as point D, generates an economic profit. 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. <span>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 is capable of operating in a loss situation as long as it covers its variable costs even though it is not earning sufficient revenue to cover all fixed cost
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um point on ATC), such as point D, generates an economic profit. 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. <span>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 is capable of operating in a loss situation as long as it covers its variable costs even though it is not earning sufficient revenue to cover all fixed cost
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