Question

The break-even point is the point at which ________.

A) the total revenue and total costs lines intersect
B) demand equals supply
C) the production of one more unit will not increase profit
D) the company can pay all of its long-term debt
E) a firm's profit goal is reached

Answer 1

The break-even point is the level of output where total revenue and total costs intersect. At this point, the firm is earning zero economic profits.

Step-by-step explanation:

The break-even point is the point at which the total revenue and total costs lines intersect. It is the level of output where the marginal cost curve intersects the average cost curve at the minimum point of average cost (AC).

At this point, the firm is earning zero economic profits.