Final answer:
The single point where the total revenue line crosses the total expense line on the CVP graph indicates the break-even point, where the firm makes zero profits.
Step-by-step explanation:
The single point where the total revenue line crosses the total expense line on the CVP (Cost-Volume-Profit) graph indicates the break-even point. At the break-even point, the firm is making zero profits. This is because at this point, the price is exactly equal to the average cost of production, meaning the firm's total revenues are equal to its total expenses. When analyzing a Cost-Volume-Profit graph, we observe different zones around the marginal cost curve. In the upper zone, where the market price is above the break-even point, the firm earns profits because the price is greater than the average cost. At the break-even point itself, where the marginal cost (MC) crosses the average cost (AC), there are zero profits. However, if the market price falls between the shutdown point and break-even point, the firm will continue to operate in the short run covering its variable costs even though it incurs losses. If the market price falls below the shutdown point, the firm shuts down immediately as it is not covering its variable costs.