Study Notes
Perfect Competition - The Shut Down Price
- Level:
- A-Level, IB
- Board:
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 3 Jul 2018
A business needs to make at least normal profit in the long run to justify remaining in an industry but in the short run a firm will produce as long as price per unit > or equal to average variable cost (AR = AVC). This is called the shutdown price in a competitive market.
Revision Video: Perfect Competition in the short run including The Shut Down Price
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