Question

what is the shutdown point for the firm in the graph below? provide your answer below: price = $ , quantity =

Explanation:

Step1: Recall shutdown - point concept

The shutdown point for a firm in the short - run is where price (P) equals the minimum of average variable cost (AVC).

Step2: Locate minimum of AVC on the graph

On the given graph, the minimum of the AVC curve occurs at the intersection of the MC (marginal cost) and AVC curves. At this point, the price is $8 and the quantity is 8.

Answer:

Price = $8, Quantity = 8