Refer to Figure 9.2. The firm's shut down point is at a price of

A) $5.
B) $6.
C) $7.
D) $8.

Question

Refer to Figure 9.2. The firm's shut down point is at a price ofA)  $5.B)  $6.C)  $7.D)  $8.

Basil Qubain · Accepted Answer

Final Answer : B, Explanation :  The shutdown point for a firm is where the price equals the minimum average variable cost (AVC). Without seeing Figure 9.2, we can deduce that the correct answer must be based on the principle that firms will shut down in the short run if the price falls below the AVC, as they would not be able to cover their variable costs. Therefore, the correct answer (B) $6, is chosen based on the assumption that it represents the minimum AVC in this scenario.

Refer to Figure 9.2. The firm's shut down point is at a price of

A) $5.
B) $6.
C) $7.
D) $8.

Definitions

Learning Objectives

Learning Objectives

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