Shutdown point

Shutdown point is when the revenue a firm receives does not cover its average variable costs, the firm should shut down immediately; the point where the marginal cost curve crosses the average variable cost curve.

Definition

According to Principles of Economics by Timothy Taylor (3rd edition),

Shutdown point. When the revenue a firm receives does not cover its average variable costs, the firm should shut down immediately; the point where the marginal cost curve crosses the average variable cost curve.