At break-even point (BEP),
A) the firm's total revenue will equal its variable costs.
B) the firm's total sales will equal its total production.
C) the firm's total cost will equal its total revenue.
D) the firm's total profits will equal its total cost.
E) the firm's total variable costs equal its total fixed cost.

Question

Quizplus · Accepted Answer

At the break-even point, the firm's total revenue will equal its total costs, which includes both variable and fixed costs. Therefore, choice C is the correct answer. Choice A is incorrect because it only considers variable costs, not fixed costs. Choice B is incorrect because total sales may differ from total production due to changes in inventory. Choice D is incorrect because profits only come into play after the break-even point. Choice E is incorrect because it only refers to the relationship between variable and fixed costs, rather than revenue and cost.

At Break-Even Point (BEP)