Shut Down point
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Refer to the attachment for a perfectly competitive firm
This firm should shutdown at any price below:
a) $4
b) $10
c) $15
d) $23
e) $5
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Solution Summary
This explains the computation of shut down point
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In the short-run the firm managers must simply try "to cover variable costs", In the short-run they must pay the fixed costs whether they operate or not.
Fixed costs are irrelevant (in the short-run) when ...
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