If a firm has a quadratic cost function, is it means that the firm does not have shut down point and never shut down? Are the changes in fixed cost do not affect the firm's shutdown decision?


$TC(q)=10+3q+0.5q^2$ is a quadratic cost function and has a shutdown point at $P=3$.

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  • $\begingroup$ I suspect by quadratic the OP means $TC(q) = q^2 + F$. $\endgroup$ – Giskard Mar 27 at 18:00
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    $\begingroup$ @Giskard: That's plausible. But even then a shutdown point still exists, albeit a rather uninteresting one. Let's wait and see if OP comes to clarify this. $\endgroup$ – Herr K. Mar 27 at 18:57

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