Microeconomics Profit Maximization: Shutdown Point

Determining the Shutdown Point of a Firm This continues a previous post on profit maximization. The question we want to continue with is when should a firm shutdown? Then answer is when P (price) = AVC (average variable cost). This is the output where firms are indifferent between producing the profit-maximizing quantity (ie. loss-minimizing quantity) … Continue reading Microeconomics Profit Maximization: Shutdown Point