What is always true at the quantity where a firm's average total cost equals average revenue?
A)The firm's revenue is maximized.
B)The firm's profit is maximized.
C)The firm breaks even.
D)Marginal cost equals marginal revenue.

Question

Quizplus · Accepted Answer

When a firm's average total cost equals average revenue, it is operating at the breakeven point, which means it is neither making a profit nor incurring a loss. Therefore, the firm breaks even at this point. Choice A is not always true, as revenue may not necessarily be maximized at this point since it depends on the market structure and demand conditions. Choice B is not always true because profit can be maximized at a different quantity where marginal revenue equals marginal cost. Choice D is not always true because marginal cost can be greater or less than marginal revenue at this quantity.

What Is Always True at the Quantity Where a Firm's