The graph above shows cost curves for a perfectly competitive firm.The firm will break even if price is:

Question

Quizplus · Accepted Answer

The break even point is where the average total cost curve intersects with the price line. In this case, it occurs at a price of about $3.90. Any price above that point will result in the firm making a profit, and any price below that point will result in a loss. Therefore, the best choice for the firm is to set their price at or above $3.90.

The Graph Above Shows Cost Curves for a Perfectly Competitive