Question

What is shutdown point explain the method to determine it

Answer 1

Answer:

Here is ur ans..

A shutdown point results from the combination of output and price where the company earns just enough revenue to cover its total variable costs.

Shutdown points are based entirely on determining at what point the marginal costs associated with operation exceed the revenue being generated by those operations.

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Answer 2

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 its total variable costs.

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