The break-even price for a perfectly competitive firm is the price that is equal to

Question

Quizplus · Accepted Answer

The break-even price for a perfectly competitive firm is the price that covers all of the firm's costs, including both variable and fixed costs. At this price, the firm earns zero economic profit, but it is able to cover all of its costs and stay in business in the long run. The break-even price is determined by the minimum point on the average total cost (ATC) curve, where ATC is equal to price. Therefore, the best choice is B, which is ATC.

The Break-Even Price for a Perfectly Competitive Firm Is the Price