5. Any time price is below the minimum point on the average variable cost curve, total revenue will be less than total variable cost, and the firm will shut down. The minimum point on the average variable cost curve (which is also the point where marginal cost and average variable cost intersect) is called the shutdown point. At all prices above the shutdown point, the MC curve shows the profitmaximizing level of output. At all prices below it, optimal short-run output is zero.