Consider the following diagram where a perfectly competitive firm faces a price of $40. Figure 8.1
-Refer to Figure 8.1. The firm earns zero profit at what output?
A) 0.
B) 34 and 79.
C) 54.
D) 60.
E) 67.

Question

Consider the following diagram where a perfectly competitive firm faces a price of $40.  Figure 8.1
-Refer to Figure 8.1. The firm earns zero profit at what output?
A) 0. 
B) 34 and 79. 
C) 54. 
D) 60. 
E) 67.

Quizplus · Accepted Answer

The firm earns zero profit at the output levels where total revenue equals total cost, which typically occurs at the break-even points. In this case, the break-even points are at outputs 34 and 79.

Consider the Following Diagram Where a Perfectly Competitive Firm Faces