The break-even price for a perfectly competitive firm is equal to the:

Question

Quizplus · Accepted Answer

The break-even price for a perfectly competitive firm is the price at which the firm is earning zero economic profit, meaning it is just covering all of its costs. In a perfectly competitive market, the firm is a price-taker and must sell its product at the market price, so the break-even price must be equal to the minimum value of average total cost. At this price, the firm is earning zero economic profit, but it can continue to produce and supply its product in the long run. Therefore, the correct choice is D, which is the minimum value of average total cost.

The Break-Even Price for a Perfectly Competitive Firm Is Equal