Question

Mention the concept of shut-down point.

Answer 1

Answer:

A shutdown point is a level of operations at which a company experiences no benefit for continuing operations and therefore decides to shut down temporarily or in some cases permanently. It results from the combination of output and price where the company earns just enough revenue to cover it's total variable.

I hope it helps you ☺

Answer 2

A shut point is a point in which the firm is closed temporarily or permanently if the firm has no profit.

What are the characteristics of the Shut-down point?

• It is the point at which a firm can hide its total variable cost
• When the average variable cost is present in minimum point
• When the total fixed cost is equal to the loss then the firm or a company is Shut-down
• When the value of marginal point becomes negative in the firm or a company then it is a shut-down point