Question

HW Score: 23.33%, 4.67 of 20 Question Help 11.2 Test A2 (static) The table shows the cost structure of a frm selling granola bars in a perfectly competitive market What is the quantity at the firm's shutdown point? The firm's shutdown point occurs at a quantity of boxes of granola bars a week. Marginal Average cost variable cost (dollars per box) Quantity (boxes per week) 0 100 200 300 400 500 600 3.00 3.20 3.50 3.82 4.20 5.00 4.40 3.90 3.50 3.55 3.60 3.75

Answer 1

The point where MC= AVC is the shut down point of the firm . This point show that firm is not generating enough revenue to overcome the variable cost .

At Quantity = 300 MC= AVC

So shut down quantity = 300