Explain the short run shutdown point for a firm.

Generally a firm should shutdown if it's revenue is less than it's total cost. However in the short run since fixed costs (e.g. rent) have already been paid the firm only considers it's variable costs (e.g. labour) when deciding whether to produce or not. Therefore the firm should cease production if revenue does not exceed variable cost. This makes sense as a conclusion since if revenue is higher than variable cost but lower than total cost (variable cost+fixed cost) the firm can start to recover some of that fixed cost. This can also be explained using a graph.
Clearly the price is lower than average variable cost at the profit maximising quantity (MR=MC), therefore revenue is less than total variable cost, resulting in the firm shutting down.