A firm reaches a break-even point (normal profit position) where
A) marginal revenue cuts the horizontal axis.
B) marginal cost intersects the average variable cost curve.
C) total revenue equals total variable cost.
D) total revenue and total cost are equal.

Question

Quizplus · Accepted Answer

At the break-even point, the company is just covering its costs and making zero profit. This means that total revenue and total cost are equal, which is represented by choice D. The other options are not necessarily true for the break-even point.

A Firm Reaches a Break-Even Point (Normal Profit Position) Where