Question

At the shut-down point, ____________.

• A. P=AVC
• B. TR=TVC
• C. The total losses of the firm equal TFC
• D. all of the above

Answer 1

The correct option is D all of the above

A firm reaches shut-down point when:

A)P=AVC,

B)TR=TVC

C) total losses of the firm equal TFC..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.