Shutdown point
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Shutdown point is when the revenue a firm receives does not cover its average variable costs, the firm should shut down immediately; the point where the marginal cost curve crosses the average variable cost curve.
Definition
According to Principles of Economics by Timothy Taylor (3rd edition),
- Shutdown point. When the revenue a firm receives does not cover its average variable costs, the firm should shut down immediately; the point where the marginal cost curve crosses the average variable cost curve.
