The Short-Run Shutdown Price Occurs Where Price Equals

question 173

Multiple Choice

The short-run shutdown price occurs where price equals

• A) MC.
• B) AVC at any point.
• C) AVC at the minimum point.
• D) AFC at the minimum point.

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Definitions:

Depreciation

The procedure of distributing the cost of a solid asset over the time it is considered useful.

Accrual Basis

A system in bookkeeping where earnings and expenses are documented at the point of transaction, not necessarily when cash exchanges hands.

Cash Basis

An accounting method that recognizes revenues and expenses only when cash is received or paid, as opposed to the accrual basis accounting.

Depreciation

The systematic allocation of the depreciable amount of an asset over its useful life, reflecting wear and tear, obsolescence, or loss of usefulness.