A firm's "break-even point" is that point where:
A) maximum profit is earned.
B) total variable cost just equals total revenue.
C) total profit just equals total cost.
D) total cost just equals total revenue.
E) None of these alternatives is correct.

Question

Quizplus · Accepted Answer

The break-even point is the point where the total cost just equals the total revenue. This means that the company is neither making a profit nor a loss. It is the point where the company has recouped all its costs and is now generating revenue that can contribute to the profits. At this point, the company can decide to operate at the current level or increase its output to generate more profits.

A Firm's "Break-Even Point" Is That Point Where