Refer to the information provided in Figure 9.2 below to answer the questions that follow. Figure 9.2
-Refer to Figure 9.2. This firm's shutdown point corresponds to Point
A) A.
B) B.
C) C.
D) D.

Question

Refer to the information provided in Figure 9.2 below to answer the questions that follow.  Figure 9.2
-Refer to Figure 9.2. This firm's shutdown point corresponds to Point
A) A. 
B) B. 
C) C. 
D) D.

Quizplus · Accepted Answer

The firm's shutdown point is where the marginal revenue curve intersects with the average variable cost curve, which is at point B in the graph. At this point, the firm is not earning any profit but can minimize its losses by shutting down production in the short run. Therefore, the best choice for the firm is to temporarily shut down production at point B.

Refer to the Information Provided in Figure 9