RRB NTPC Mains or Stage 2 Model Paper 10 with solutions

(c) The situation when a firm is operating at loss in the short period in perfect competition arises when the price is so low that total revenue is not even enough to cover the variable cost of production. Shutdown point is that point at which the price is equal to average variable costs or the firm covers its variable costs. So it should operate as long as it covers even the variable costs.