Principles of Microeconomics / Unit 7 MIC 0616 short lesson, about 20 seconds
The Shutdown Point
Captions available
The idea
The shutdown point is the lowest point of average variable cost, where marginal cost crosses it. Any price below that point makes shutting down the better choice.
In practice
For the farm, thirteen fifty at four flats.
Where people slip
The shutdown point sits below and to the left of the break-even point, because average variable cost bottoms out first.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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