In the short run,a perfectly competitive firm produces output and breaks even if the firm produces the quantity at which:

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In the short run, a perfectly competitive firm produces output and breaks even if the firm produces the quantity at which price (P) is equal to average total cost (ATC). At this point, the firm is earning zero economic profit, but is able to cover its total variable and fixed costs. If P is less than ATC, the firm incurs losses, while if P is greater than ATC, the firm earns positive economic profits. Option D is a formula for finding P, but it does not determine the point at which the firm breaks even.

In the Short Run,a Perfectly Competitive Firm Produces Output and Breaks