The intersection of the average variable cost curve and the marginal cost curve, which shows the price where the firm would lack enough revenue to cover its variable costs, is called the shutdown point. If the perfectly competitive firm can charge a price above the shutdown point, then the ...
What you’ll learn to do: determine the break-even, and the shutdown points of production for a perfectly competitive firm In this outcome, you will see why it is sometimes advantageous for a firm to continue producing even when it is experiencing losses. LEARNING ACTIVITIES The learning activ...