The Shutdown Point Is That Point at Which

question 47

Multiple Choice

The shutdown point is that point at which

• A)price equals marginal cost.
• B)average fixed cost equals marginal cost.
• C)average variable cost equals marginal cost.
• D)average total cost equals marginal cost.
• E)none of the above.

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Definitions:

Total Cost

refers to the sum of all expenses incurred in the production of goods or services, including fixed and variable costs.

Computer Software

Programs and operating information used by a computer to perform specific tasks.

Average Fixed Cost

The total fixed costs of production divided by the quantity of output produced, illustrating how fixed costs dilute over larger quantities of output.

Total Cost

The total expense incurred in the production of goods or services, including both fixed and variable costs.