shutdown pricea market price that is so low that a profit-maximizing supplier is unable to recoup the SHORT-RUN unit VARIABLE COST of producing a product. At this price, the firm is unable to generate sufficient revenue to make any CONTRIBUTION towards its FIXED COSTS and cannot even cover its variable costs so that losses are incurred, necessitating a decision to close down its production facilities. See LOSS, LOSS MINIMIZATION.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005