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Answer:

shutdown point

explaination:

The shutdown point is a critical concept in economics that indicates the level of output at which a firm's revenues are equal to its variable costs. If a firm cannot cover its average variable costs, it is incurring losses on each unit produced, making it unsustainable to continue operations in the short run. At this point, the firm may choose to temporarily cease production to minimize losses until market conditions improve. Understanding this concept helps firms make informed decisions about whether to continue operating or to shut down temporarily.

Topic: Economics, Firm Operations, Shutdown Point

Tags: economics firm operations shutdown point average variable costs

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If a firm's revenues do not cover its average variable costs, then that firm has reached its _____

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