CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

The shutdown point is the minimum average ______ cost point.
A. variable
B. fixed
C. total
Explanation: The shutdown point occurs when a firm is better off not operating than continuing to operate. It is when the market price falls below the minimum average variable cost. At this price, the firm incurs only fixed costs and loses less money than when operating at a price that does not cover variable costs.

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