If a perfectly competitive firm in the short run is able to pay its variable costs and all of its fixed costs and more,then it is operating in the range on its marginal cost curve that is

Question

Quizplus · Accepted Answer

The break-even point is where the firm is just able to cover its total costs, including both fixed and variable costs. Therefore, if the firm is able to pay its variable costs and all of its fixed costs and more, it must be generating revenues above its break-even point. Additionally, since the firm is covering its costs and making a profit, it must be operating at a point where marginal revenue exceeds marginal cost, which occurs above the shutdown point. Therefore, the correct answer is A) above the break-even point.

If a Perfectly Competitive Firm in the Short Run Is