Question

A shut down point is the point at which
a) Marginal cost and purchase price should be considered
b) Contribution is less than fixed cost
c) Contribution is equal to fixed cost
d) None of these​

Answer 1

Answer:

d option.............

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Answer 2

The correct answer is option d. None of these.​

• The shut-down point is the lowest price at which a company will choose to close down rather than continue operating.
• To put it another way, it's the bare minimum price and quantity required to keep operations running.
• The variable cost per unit (expressed as marginal cost, MC) decreases as the number of units produced increases up to a particular point.
• The variable cost rises after this point.
• When the amount on the x-axis is plotted against the average variable cost on the y-axis, the result is a U-shaped curve.