For a perfectly competitive firm facing the short-run break-even price

Question

Quizplus · Accepted Answer

A firm facing the short-run break-even price is earning enough revenue to cover all its expenses, including both variable and fixed costs. This means that it is earning a normal profit, which is included in accounting profits, but not in economic profits. Therefore, the firm has zero economic profit in this situation. It does not necessarily need to shut down or expand production, but could continue to operate in the short run.

For a Perfectly Competitive Firm Facing the Short-Run Break-Even Price