what is the shutdown point?explain the circumstances under which a perfectly competative firm reaches such a point
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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
A firm reaches shut-down point when: AR=AVC.When a firm is able to cover its variable costs only, it will be at shut-down point. At shut-down point, the firm no longer gets benefits from its operations.
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