Explain Shut Down Price
Explain the term Shut Down Price? Illustrate it.
Expert
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.
If $9 is required to buy £2, what is the exchange rate for USA dollar? Answer: £1 = 9/2 = $4.5, i.e., £1 = $4.5.
The consumer reaches equilibrium for any two goods X and Y whenever the: (1) MUx/Px = MUy/Py. (2) MUx/MUy = Py/Px. (3) Utility from X equivalents the utility produced by Y. (4) Point of diminishing returns is arrived at. Can someon
A tax will be backward-shifted totally when the: (i) demand curve is vertical and the supply curve is slopes up. (ii) demand curve slopes down and the supply curve is vertical. (iii) supply curve is perfectly elastic and the demand cu
Gross domestic capital formation is always greater than gross fixed capital formation
Determine the value of MPC whenever MPS is zero? Answer: Whenever MPS = 0, MPC = 1 – 0 = 1.
WHAT IS THE CHANGE IN EQUILIBRIUM gdp CAUSED BY THE ADDITION OF NET EXPORTS?
Define bank rate policy? How does it operate as a technique of credit control? Answer: Bank rate is the rate at which the central bank provides loans to the commerc
With the help of graph discuss the determinants of transaction demand.
Why are receipts from taxes classified as revenue receipts? Answer: Receipts from taxes are classified as revenue receipts since they do not build liabilities nor r
Describe the following terms: (i) Business fixed investment (ii) Inventory Investment (iii) Residential construction Investment (iv) Public Investment.
18,76,764
1959465 Asked
3,689
Active Tutors
1457330
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!