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    can someone please explain the shutdown point concept?
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    It is the output level at which total revenue equals total variable costs, and the product price equals its average variable costs. Basically, the point when a product is no longer making a profit is the shutdown point, as the firm is indifferent to whether they close down production (temporarily or permanently) as it no longer financially benefits them to continue production.
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    In the short run the shut down point is when P< AVC, in the long run it is assumed all cost are variable so you need to make at least normal profits to continue in production. For Edexcel you need to be aware of the diagrams for shut down/not shut down using a perfect/imperfect competition diagram.
 
 
 
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