Why the Shutdown Rule Comes from AVC (Visual Proof) | AP, IB, A-Level Economics скачать в хорошем качестве

Why the Shutdown Rule Comes from AVC (Visual Proof) | AP, IB, A-Level Economics

Why does the shutdown rule depend on Average Variable Cost — not Average Total Cost? In this video, we derive the shutdown rule from first principles, using: economic logic algebraic profit comparison calculus (minimization of AVC) clear, exam-ready graphs You will see why fixed costs cancel out, how minimum AVC becomes the shutdown price, and why producing below this point increases losses. This explanation is ideal for: AP Microeconomics IB Economics A-Level Economics undergraduate microeconomics students If you understand this video, you will never confuse AVC with ATC again. 👉 In the next video, we show how this rule leads directly to the firm’s short-run supply curve. ⏱️ Chapters 00:00 Why students memorize the shutdown rule 00:36 Fixed vs variable costs (short run) 01:20 The real economic question 01:32 Profit logic and shutdown decision 02:48 Fixed costs cancel out 03:24 Price ≥ AVC condition 03:40 AVC function and intuition 04:36 Calculus: finding minimum AVC 05:44 Shutdown price explained 06:19 MC and AVC relationship 06:46 Price falling animation 07:36 Fixed cost = 100 example 08:08 Summary of the shutdown rule 08:57 Link to short-run supply curve #APMicroeconomics #IBEconomics #ALevelEconomics #Microeconomics #FirmTheory #AverageVariableCost #ShutdownRule #EconomicIntuition #ExamEconomics shutdown rule economics, average variable cost, AVC shutdown rule, AP Microeconomics shutdown rule, IB Economics firm theory, A Level Economics costs, short run firm decision, microeconomics cost curves, AVC vs ATC, marginal cost AVC minimum, economic profit and loss, firm shutdown condition, exam microeconomics explanation, EduByAmjad