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The Shut-down Price, Reconsidered

Sproul, Michael (2016): The Shut-down Price, Reconsidered.

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Abstract

The textbook assertion that the shut-down price is at the minimum point of average variable cost AVC is shown to be incorrect. Once we properly distinguish between fixed costs and sunk costs, it becomes clear that the shut-down price is at the minimum point of average cost AC.

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  • The Shut-down Price, Reconsidered. (deposited 02 Nov 2016 20:18) [Currently Displayed]
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