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, a competitive firm is said to break-even if at equilibrium the:

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, a competitive firm is said to break-even if at equilibrium the:

Quizplus · Accepted Answer

In the short run, a competitive firm is said to break-even if it earns zero economic profit, which occurs when price equals the average total cost. At this point, the total revenue covers all the costs, including the fixed cost, and the firm is just earning a normal profit. Thus, in the given figure, at the equilibrium point where MR and MC intersect, the price corresponding to this point also falls on the ATC curve, indicating that the firm is breaking even. Therefore, the correct choice is D.

The Figure Given Below Shows the Revenue and Cost Curves