The figure given below shows the revenue and cost curves of a perfectly competitive firm.Figure 10.5
MC: Marginal cost curve
MR: Marginal revenue curve.ATC: Average-total-cost curve
AVC: Average-variable-cost curve
-In the short run, the firm's break-even point is:

Question

The figure given below shows the revenue and cost curves of a perfectly competitive firm.Figure 10.5
  MC: Marginal cost curve
MR: Marginal revenue curve.ATC: Average-total-cost curve
AVC: Average-variable-cost curve
-In the short run, the firm's break-even point is:

Quizplus · Accepted Answer

The break-even point is the quantity at which the firm's total revenue equals its total cost, including both fixed and variable costs. This occurs at the minimum point of the firm's average-total-cost curve, which is at the quantity where the ATC curve intersects the MR curve. At this point, the price that the firm receives (which is equal to its marginal revenue) is just enough to cover all of its costs, so it earns zero economic profit. Therefore, the correct choice is B, the minimum point of the firm's average-total-cost curve.

The Figure Given Below Shows the Revenue and Cost Curves