Final answer:
The 10 units of output where a firm starts making a positive total revenue above that amount is known as the break-even point. It is at this point where the firm neither makes a profit nor a loss. Profits are realized once total revenue exceeds total costs after this point.
Step-by-step explanation:
When a firm starts making a positive total revenue above 10 units of output, the 10 units of output is referred to as the break-even point. This is the level of output at which the firm's total revenues are equal to its total costs. At this point, the firm is not making a profit but also not incurring losses. After surpassing the break-even point, the firm begins to realize profits.
Upon choosing price and quantity, the firm can use data to determine the most profitable quantity to produce, by looking at the point where total revenue exceeds total costs by the greatest margin. This can be clearly seen by using graphs or tables that detail total revenue, total cost, and profit at various levels of output. It's crucial to understand that a firm will make losses if the total costs exceed total revenues, which happens both before the break-even point and at output levels so high that increased costs diminish profits.