🤑ap microeconomics review

Shutdown decision

Written by the Fiveable Content Team • Last updated August 2025
Verified for the 2027 exam
Verified for the 2027 examWritten by the Fiveable Content Team • Last updated August 2025

Definition

A firm's short-run choice to produce zero output when total revenue falls below total variable cost or when price falls below average variable cost.

AP course connection

Topic 3.6: 3.6 Firms' Short-Run Decisions to Produce and Long-Run Decisions to Enter or Exit a Market

Unit 3

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