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| In a perfectly competitive market, the last price-output combination on the supply curve at which the firm produces positive output is the point of minimum AVC where the SMC curve cuts the AVC curve. What is this point called? |
Shut down point Lowest point Shut up point None of above |
| Shut down point |
| Along the supply curve as we move down, the last price-output combination at which the firm produces positive output is the point of minimum AVC where the SMC curve cuts the AVC curve. Below this, there will be no production. This point is called the short run shut down point of the firm. |
