Question

If a firm's revenues do not cover its average variable costs, then that firm has reached its _________________ . price taking point shutdown point marginal point opportunity margin

Answer 1

If a firm's revenues do not cover its average variable costs, then that firm has reached its shutdown point.

What is average variable costs?

The average variable cost refers to the variable cost per unit of goods or services produced by a firm.

Average variable cost is total variable cost divided by variable input. Variable input is the input that varies with the output. For example, labor is an example of a variable input.

Average variable cost equals:

1.Average total cost minus average fixed cost.

2. Price of the variable input times the quantity of the variable input.

Learn more about average variable costs here: https://brainly.com/question/26959638

#SPJ1