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Solution:
The correct answer is (b) average variable cost equals price at the profit-maximizing level of output.

A firm's shutdown point is the level of output at which the price equals the minimum average variable cost of production. In other words, the firm is able to cover its variable costs but not its fixed costs, so if it produces any less than this level, it will be better off shutting down and producing nothing at all.

Option (a) is incorrect because average total cost includes fixed costs, so the firm would have already shut down before average total cost equals price.

Option (c) is incorrect because average fixed cost is not relevant to the shutdown decision. Fixed costs are sunk costs that the firm has to pay regardless of whether it produces anything or not.

Option (d) is incorrect because the profit-maximizing level of output is where marginal cost equals marginal revenue, not price. The shutdown point is a level of output where the firm is not covering all of its costs, so it is not maximizing profits.
Correct option is (b)