A firm reaches shut-down point when:

A R = A V C

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

T R = T C

No worries! We‘ve got your back. Try BYJU‘S free classes today!

T C = A V C

No worries! We‘ve got your back. Try BYJU‘S free classes today!

M C = A C

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B $A R = A V C$
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.

Suggest Corrections

Similar questions

Q. If a firm shut down at a level when AVC = Price, the firm restricts its losses to ________.

A firm maximises its profit when

T R = T C

A firm's SMC schedule is shown in the following table. The total fixed cost of the firm is Rs. 100. Find the TVC, TC, AVC and SAC schedules of the firm.

$\begin{matrix} Q & 0 & 1 & 2 & 3 & 4 & 5 & 6 S M C & 500 & 300 & 200 & 300 & 500 & 800 \end{matrix}$

Q. A firm's SMC schedule is shown in the following table. The total fixed cost of the firm is Rs. 100. Find the TVC, TC, AVC and SAC schedules of the firm.

Q	0	1	2	3	4	5	6
SMC	-	500	300	200	300	500	800

Q. Should production be discontinued by the firm in the short-run when

A R = A V C

Join BYJU'S Learning Program

A firm reaches shut-down point when:

The correct option is B AR=AVCA 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.

The correct option is B $A R = A V C$
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.