--%>
Assignment Help - homework help

Explain Shut Down Price

Explain the term Shut Down Price? Illustrate it.

E

Expert

Verified

Shut Down Price (PSD): In purely competitive firm it is the price at which it loses exactly similar amount of money as if it shut down totally (that is, losing the value of fixed cost). Any price lesser than this is a price at which the firm is fine off shutting down than operating (that is, it will lose less shutting down than generating where marginal revenue equivalents marginal cost). Any price bigger than this and the firm is fine off operating than shutting down in short run, even when it is making a loss.  The shut down price is at minimum point on the average variable cost (AVC) curve, or PSD = minimum AVC.

   Related Questions in Macroeconomics

  • Q : Analyzing number of event that

    How can we analyze the number of event that influences the market?

    		•
  • Q : Internet technology in airline

    Speculate regarding the behavior which could result from Internet technology in airline transactions and propose 2 or more strategies to deal with them.

    		•
  • Q : Balance the budget general approaches

    Quetion: Explain why there are long-term Federal government budget problems.   Explain why the base-line forecast of the CBO is misleading.   Include in your answer why solutions to the problem

    		•
  • Q : Define voluntary unemployment Voluntary

    Voluntary unemployment: It refers to a condition when person are not willing to do work at customary market wage rate, though they are receiving a work.

    		•
  • Q : Explain about the marginalism theory

    Most economists believe such that people increase an activity when they perceive the expected additional benefits as exceeding the expected extra cost, but decrease their level of an activity whenever they believe the benefits from the last few units of the activity a

    		•
  • Q : Market shift when exporting When the

    When the U.S. furniture market is primarily in equilibrium at point e on S0D0 and then Chinese manufacturers start exporting more furniture to the United States, then this market would shift towards a new equilibrium at: (1) point a. (2) point b. (3) point c. (4) poin

    		•
  • Q : Paradox of Value-High values of

    The fact that most of the necessities for life like water are priced much lower than the frivolities like diamonds is addressed by the: (1) Utilitarian enigma. (2) Law of diminishing marginal utility. (3) Rational ignorance of hypothesis. (4) Paradox of the value. (5)

    		•
  • Q : Physical quality of life index DISCUSS

    DISCUSS the experience of high GNP countries and low GNP with regard to PQLI.

    		•
  • Q : Define Macro Economics Macro Economics

    Macro Economics: Macro economics studies the economy as an entire.

    		•
  • Q : Economic growth model Explain the main

    Explain the main features of Harrod - Domar Growth model. How does the Harrod Domar model explain the occurrence of trade cycles?

    		•