Practice - The Shut Down Point
Enroll to start learning
You’ve not yet enrolled in this course. Please enroll for free to listen to audio lessons, classroom podcasts and take practice test.
Practice Questions
Test your understanding with targeted questions
Define the shut down point in economic terms.
💡 Hint: Think about what it means for costs and production levels.
What cost structure indicates a short run shut down point?
💡 Hint: Focus on short run production costs.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What signifies the short run shut down point for a firm?
💡 Hint: Think about the relationship between market prices and variable costs.
In the context of perfect competition, when should firms consider shutting down in the long run?
💡 Hint: Consider what long term sustainability requires.
Get performance evaluation
Challenge Problems
Push your limits with advanced challenges
A firm has fixed costs of Rs 500 and average variable costs of Rs 40. What is the shut down price when it faces a market price of Rs 30? Determine the effects of this situation.
💡 Hint: Compare the market price to AVC.
Analyze how a sustained price below the long run average cost could impact a firm's long-term market strategy.
💡 Hint: Consider the implications of continuous losses.
Get performance evaluation
Reference links
Supplementary resources to enhance your learning experience.